The invention discloses a preparation method of a color anti-counterfeiting code cloth label. The preparation method comprises a step 1, establishing a database; a step 2, converting data informationinto an image file; a step 3, converting the image file into a pattern plate texture organization electronic file special for a textile machine; a step 4, performign waterless yarn dyeing, including:(1) dyeing first color paper and second color paper; and (2) transferring the colors of the first color paper and the second color paper to the yarns; a step 5, weaving an anti-counterfeiting code; feeding the dyed yarns into the textile machine such that the textile machine organizes an electronic file according to the pattern plate texture and weaves the anti-fake plaiting label in a warp-wise mode; and a step 6, analyzing the data in the step 1 and the cloth labels woven in the step 5 by adopting automatic detection equipment, classifying qualified products and unqualified products, ensuring the qualification of the products, and making sub-packaging and detailed reports. According to the invention, the color diversity of the anti-counterfeiting code is increased, and the anti-counterfeiting effect is improved; and the anti-counterfeiting code cloth label is thinned, so that the softness of the anti-counterfeiting code cloth label is improved. Meanwhile, the production efficiency ishigh, the production loss is low, and safety and environmental protection are achieved.