The invention discloses an organic fertilizer prepared by utilizing edible fungus residues and a preparation method of the organic fertilizer. The organic fertilizer comprises the following substances, in parts by weight: 15-25 parts of plant residues, 50-60 parts of animal feces, 2-3 parts of strains, 10-15 parts of water, and 15-25 parts of the edible fungus residues. The preparation method comprises the following steps: 1, mixing the plant residues, the animal feces, the water and the strains, performing accumulation fermentation for 30 days, performing turning once every 3-5 days, and keeping the water content to be 30-60%; 2, mixing the edible fungus residues, the water and the strains, adjusting the water content to be 60%, performing accumulation fermentation for 20 days, keeping the temperature at 33-35 DEG C, and performing turning once every 2 days; and 3, mixing the products of the step 1 and the step 2, performing accumulation for 10 days, and performing turning once every3 days to obtain the organic fertilizer. According to the method provided by the invention, the edible fungus residues and the traditional composting materials are mixed, so that the conversion speedand conversion rate of organic matter in soil are improved, the content of active humic acid is improved, the strains play a full role, the high-temperature period is prolonged, the pH conforms to a standard of a decomposed compost, and the content of nitrogen and potassium of the compost is increased.