The invention discloses a multifunctional emulsion containing algae hydrolysates and collagen. The multifunctional emulsion is prepared from 1,3-butanediol, glycerol, polysorbate-20, panthenol, hexadecanol, octadecanol, tocopherol, allantoin, hyaluronic acid, ethylenediamine tetraacetic acid disodium, sweet almond oil, squalane, octyldodecanol, lemon essential oil, algae hydrolysates, fish scale collagen protein and triethanolamine. The invention further discloses a preparation method of the multifunctional emulsion. According to the multifunctional emulsion, hydrolysates of macroalgae and fish scale collagen protein are taken as main active ingredients and matched with active ingredients such as hyaluronic acid, tocopherol, squalane, allantoin and the like, the mixture and cosmetic ground substances are mixed and homogenized, and the multifunctional emulsion is obtained. The multifunctional emulsion has the advantages of being safe, mild, capable of whitening skin, moisturizing skin and preventing wrinkles and ageing and free from stimulation, cannot damage skin, can protect skin and moisturize the skin and further has the efficacy of skin whitening, wrinkle resisting and ageing prevention.