The invention discloses a liquid expanding agent capable of expanding step by step and a preparation method thereof. The liquid expanding agent is prepared by the following steps: 1, weighing a nano magnesium oxide powder mixture, butanol, span-80 and water, and stirring at a constant temperature of 30-40 DEG C for 1 hour; 2, heating to 50-70 DEG C, sequentially adding polypropylene glycol 400, dimethicone and a shrinkage reducing component, and stirring for 1-2 hours; and 3, adding polyacrylamide, stirring for 1-2 hours, curing at constant temperature for 1 hour, and cooling to room temperature to obtain the liquid expanding agent capable of expanding step by step. An expansion component in the liquid expanding agent is formed by grinding, modifying and mixing magnesium oxide fired at different temperatures of 700 DEG C, 900 DEG C and 1100 DEG C, the magnesium oxide powder is mixed and ground to a nanometer level, the hydration time of the three magnesium oxide powder prepared at different firing temperatures is different, and the step-by-step expansion effect is achieved; by compounding with the shrinkage reducing component and the like, the volume expansion of concrete can be remarkably improved, the concrete volume shrinkage is reduced, and the crack resistance and impermeability of concrete are improved.