The invention provides a flame-retardant inorganic interior wall coating and a preparation method thereof. The coating is prepared by mixing the following components comprising, by weight, 250-315 parts of deionized water, 3-5 parts of hydroxyethyl cellulose, 0.5-2 parts of bentonite, 3-8 parts of a stabilizer, 1-5 parts of a defoaming agent, 1-2 parts of a preservative, 100-250 parts of magnesiumhydroxide, 90-190 parts of titanium dioxide, 30-80 parts of calcined kaolin, 50-80 parts of 800# heavy calcium carbonate, 150-230 parts of inorganic potassium silicate, 50-100 parts of a styrene-acrylic emulsion and 2-5 parts of a thickener. The paint has the characteristics of flame retardancy, compactness, multicolor, scratch resistance, cracking resistance, dew formation resistance, mildew resistance, stain resistance, easiness in scrubbing and good storage stability.