The invention discloses an improved acidified soil water-retention compound fertilizer and a preparation method thereof. The improved acidified soil water-retention compound fertilizer is prepared from, by weight, 20-23 parts of urea, 3-4 parts of an EM fungicide, 20-22 parts of biogas residues, 6-8 parts of silkworm excrement, 8-10 parts of lignite, 18-22 parts of sodium humate, 12-15 parts of potassium dihydrogen phosphate, 12-13 parts of chitosan, 8-10 parts of smoke slag, 20-30 parts of tea tree waste, 1-2 parts of antibiotics, 6-8 parts of bentonite, 4-6 parts of boron mud, 6-8 parts of blast furnace slag, 6-9 parts of polylactic acid, 8-12 parts of rosin pentaerythritol ester, 0.5-1 part of N,N-methylene bisacrylamide and a proper amount of water. The boron mud, the bentonite and other ingredients are added to the improved acidified soil water-retention compound fertilizer, alkaline ingredients are increased, meanwhile the power of hydrogen is isolated and buffered, the acid-base equilibrium of soil is regulated, accordingly acidified soil can be effectively improved, and soil fertility is improved.