The invention discloses a PC (Polycarbonate) material with an excellent transparent light diffusion function and a preparation method thereof. The PC material is composed of polycarbonate, flame retardant masterbatch, an auxiliary flame retardant, a compound light diffuser, an antioxidant, a flame retardant synergist, a lubricant and other auxiliaries. The principle ingredient of the PC material is PC resin; the PC material is extruded by two steps, wherein the first step is to blend a sulfonate type major flame retardant and an organic silicon flame retardant with the PC resin by melting and granulate the mixture through extrusion by virtue of a twin-screw extruder so as to obtain the light diffusible flame retardant masterbatch, and the second step is to add the compound light diffuser, the flame retardant masterbatch, the antioxidant, the flame retardant synergist, the lubricant and other auxiliaries for further melting blending by taking PC as the major ingredient, and then extrude and granulate the mixture. The flame-retardant light diffusible PC material provided by the invention can be widely applied to an LED (Light-Emitting Diode) lamp, the backlight of a liquid crystal display, a transmission type screen, a decorative lighting billboard, an advertisement lamp box and the like in the lighting field.