The invention provides a novel large-current-carrying heat-resistant aluminum alloy wire and a preparation method thereof. The aluminum alloy wire is composed of elements such as Se, Ru, Zr, Sc, Ni and Si, the Vickers hardness of the aluminum alloy wire at the room temperature is no less than 70 HV, the extension strength of the aluminum alloy wire at the room temperature is no lower than 200 Mpa, the elongation is no less than 10%, the electric conductivity at 20 DEG C is no lower than 58% that of IACS, and the continuous use temperature is no lower than 165 DEG C. According to the method, the wire is obtained through processing by steps such as smelting, casting, rolling, friction stirring processing, slicing, overlaying, extruding, drawing and heat treatment, and finally the wire with good physical and chemical properties is obtained. The aluminum alloy wire adopts common industrial grade aluminum ingots as raw materials for production, compared with the prior art, the product properties of higher electric conductivity, higher strength and better heat resistance can be obtained, and the wire has good development prospects.