The invention discloses a production method of an environmentally friendly fertilizer capable of improving soil. The production method comprises: taking river bottom silt and fishpond sludge, heatingto evaporate the moisture, and grinding; mixing plant ash, waste tea leaves and bagasse, placing into a crusher, and crushing; and mixing animal dry manure and the obtained material, uniformly stirring, adding basalt powder, tea shell powder, a calcium-magnesium-phosphorus fertilizer, attapulgite and blast furnace slag, adding a proper amount of normal saline, heating, adding biochar, peat soil, afertilizer fermenting agent, a microbial agent, an antioxidant, antibiotics, bio-enzyme and trace elements, uniformly stirring and mixing, placing into a granulator, and granulating to obtain an environmentally friendly fertilizer. According to the present invention, plants or industrial waste and animal manure are used as the raw materials of the fertilizer, such that the resources are reasonably utilized, the energy is saved, the prepared fertilizer is natural and environmentally friendly, cannot pollute soil, can improve the soil fertility, improve the utilization rate of the fertilizer, and has characteristics of environmental protection, safety and low cost.