The invention relates to an organic fertilizer converted by waste silkworm faeces and a production method of the organic fertilizer. The production method comprises the steps of spreading the silkworm faeces to a spreading height of 10-15cm, mixing grenadine syrup with a weight percentage of 10%, lactic acid bacteria and yeast in the proportion of (250-350): (40-60):1, obtaining fermentation liquid after uniform stirring, uniformly spraying the fermentation liquid on the spread silkworm faeces till the silkworm faeces are wet through exactly, spreading a layer of silkworm faeces to a spreading height of 10-15cm again on the sprayed silkworm faeces, uniformly spraying the fermentation liquid till the silkworm faeces are wet through exactly, treading down, covering a film on the silkworm faeces, keeping for 15-30 days, turning, covering with a film for 10-15 days again, adding phosphorus and potassium to the silkworm faeces, with a weight ratio of silkworm faeces, phosphorus and potassium of 100:(3-6):(1-4), pelleting, drying, bagging, and then obtaining a finished product. The waste silkworm faeces are converted into the environment-friendly organic fertilizer, so that the problem that the silkworm faeces pollute the environment can be solved, endogenesis hormone secretion of plants can be stimulated, the tillering capacity of plant cells is high, the effective stems are more, the crop planting requires no nitrogenous fertilizer for prompting growth, and the quality is good.