The invention provides a preparation method and application of an icotinib intermediate, and belongs to the technical field of chemical synthesis. The preparation method comprises the following steps: (1) adding triethylene glycol into an alkaline mixed solution, and dropwise adding a mixed solution of paratoluensulfonyl chloride and tetrahydrofuran to obtain a product 1; (2) mixing the product 1, 3, 4-dihydroxybenzonitrile, dropwise adding the mixture into a mixed solution of acetonitrile and potassium carbonate, and carrying out cyclization reaction to obtain a product 2; (3) dissolving the product 2 in glacial acetic acid, and dropwise adding fuming nitric acid and concentrated sulfuric acid to obtain a product 3; (4) dissolving the product 3 in a mixed solution 1 of acetic acid and ethanol, and adding iron powder to generate an icotinib intermediate product BPI-X04; (5) dissolving the icotinib intermediate product BPI-X04 in methylbenzene, and then adding N, N-dimethyl dimethyl acetal, so as to obtain an icotinib intermediate product BPI-X05; the process provided by the invention effectively reduces the discharge amount of pollutants, does not add highly toxic additives such as phosphorus oxychloride, and greatly improves the yield.