The invention discloses a multifunctional sweat-absorbing breathable elastic denim and a preparation method thereof, and relates to the technical field of garment production. The technical scheme is as follows: the elastic denim comprises a denim body I, the denim body I comprises a cloth surface, fiber blended threads, high-elasticity threads, silkworm pupa protein fiber fabric, a cloth inner surface, T composite fibers, stretch silk cotton fabric, a first hot melt adhesive net film and a second hot melt adhesive net film, the cloth surface is arranged at the top of the denim body I, the bottom of the cloth surface is fixedly connected with the first hot melt adhesive net film, the silkworm pupa protein fiber fabric is arranged at the bottom of the first hot melt adhesive net film, the second hot melt adhesive net film is fixedly connected to the bottom of the silkworm pupa protein fiber fabric, and the cloth inner surface is arranged at the bottom of the second hot melt adhesive netfilm. The breathable elastic denim has the advantages of being easy and comfortable in elasticity, soft, capable of absorbing moisture, quick to dry, smooth in hand feeling and good in skin friendliness.