The invention discloses a polyolefine sheathing compound for a coaxial cable and a preparation method thereof. The sheathing compound consists of the following components in parts by weight: 60-90 parts of ethylene-propylene-diene rubber, 5-25 parts of high-density polyethylene, 5-15 parts of functional polyolefin resin, 180-200 parts of flame retardant, 1-3 parts of surface modifier, 0.01-0.05 part of crosslinking agent, 0.5-2 parts of antioxidant and 1.5-9 parts of processing aid. The preparation method comprises the following steps of: putting the flame retardant into a high-speed stirrer for stirring at a high speed at the temperature of not lower than 80 DEG C; adding organosilane and stirring for 3-5 minutes; putting the remaining materials into the high-speed stirrer for continually stirring for 3-5 minutes; adding into a double-screw mixing extruder set by using a feeder for pelletizing; and drying. The sheathing compound has the advantages of flame retardance, low smoke, freeness from halogen, low toxicity, freeness from harmful heavy metals such as lead, cadmium and the like, freeness from phosphorus, difficulty in burning and small smog harm in case of fire, environmental friendliness, high temperature resistance level of 105 DEG C, high extruding performance, excellent electric performance, no need of subsequent crosslinking after stranding, saving in a large amount of manpower and materials and great reduction in the manufacturing period of the cable.