The invention belongs to the field of leather coating, and particularly discloses a leather coating composition and a preparation method thereof. The leather coating composition comprises acrylic resin, wood cellulose, silica, a feeling agent, wax, a foaming agent, an antioxidant, a curing agent, a neutralization agent, a dispersant, a wetting agent, a leveling agent, a defoaming agent, a sterilizing agent, essences, hydroxyethyl cellulose and water. The preparation method comprises the following steps: adding the components in three steps under a stirring condition, uniformly mixing the components, filtering and packaging. The leather coating composition prepared by the method disclosed by the invention is a waterborne environmentally friendly material, has good physical properties such as excellent adhesive force, fillibility, settability, covering power, air bubble forming, winding resistance and scraping resistance. The leather coating composition has high combination degree with leather fibers, and after leather is ironed and pressed by a plate, a surface formed by the coating is smooth, does not become thick, resists winding and has good settability, good breathability and good handfeel; and the leather coating composition can be directly used for coating good two-layer leather blank and bad head layer leather blank.