The invention provides a production method of washable piece-dyed knitted fabric. The production method comprises steps as follows: undyed yarn is knitted into gray fabric, the gray fabric is sequentially subjected to boiling-off, enzyme wash, dyeing, scotching, drying, liquid ammonia mercerization, neutralization, softening, scotching, drying, setting and preshinking, and the washable piece-dyed knitted fabric is obtained. The production method adopts steps of boiling-off, enzyme wash, dyeing and liquid ammonia mercerization sequentially, the liquid ammonia mercerization effect and the liquid ammonia recycling are facilitated, and resin treatment is combined, so that an obtained knitted product has better dimensional stability, and more durable hand feeling and color are kept; and the fabric has high flatness, touches comfortable and is soft, elastic and better in strength. By means of the production method, various properties of the knitted product are improved, the additional value and the technological content of the knitted product are increased, and recyclable liquid ammonia used for treatment is environment-friendly.