The invention discloses a thermoplastic low-smoke halogen-free flame-retardant environment-friendly sheath material for power cables and a preparation method thereof. The thermoplastic low-smoke halogen-free flame-retardant environment-friendly sheath material for power cables comprises the following components in parts by weight: 60-80 parts of EVA (ethylene-vinyl acetate), 20-30 parts of HDPE (high-density polyethylene), 10-15 parts of EPDM (ethylene-propylene-diene monomer), 15-25 parts of compatiblizing agent, 100-150 parts of halogen-free flame retardant, 0.5-1 part of antioxidant 1035, 0.5-1 part of antioxidant DSTP, 1-2 parts of ethylene bis stearamide, 3-5 parts of DCP (dicumyl peroxide), 2-4 parts of zinc oxide, 1-2 parts of calcium stearate, 10-20 parts of dimethyl methyl phosphonate, 30-40 parts of nano kaolin, 2-3 parts of stearic acid and 0.5-1 part of isopropyl tri(dioctylpyrophosphate)titanate. The sheath material disclosed by the invention has the advantages of excellent physical and mechanical properties, excellent flame retardancy, favorable high/low temperature resistance, favorable oil resistance, favorable solvent resistance, favorable wear resistance, favorable ozone resistance, favorable aging resistance, high flexibility, crack resistance and the like, is very durable, environment-friendly and pollution-free, and can completely satisfy the requirements for modern power cables.