The invention discloses a preparation method of a high-precision powder metallurgy rubber-coated gear, and belongs to the technical field of powder metallurgy. The preparation method comprises the following steps in sequence: mixing, forming, sintering, oil immersion, shaping, steam treatment, heat treatment, sand blasting, adhesive coating, rubber coating and finish machining to obtain the high-precision powder metallurgy rubber-coated gear. The gear is subjected to steam treatment after the shaping step and before the induction quenching step, oil in the gear can be removed, a compact oxide layer is formed on the outer surface, the hole sealing effect is good, and the treatment cost is low; the tooth hardness requirement of the gear can be met through the induction quenching step; the magnetic powder inspection step can inspect gear tooth cracks; and after magnetic powder inspection is completed, the rubber-coated surface of the gear is subjected to sand blasting treatment, the rubber-coated surface with the surface roughness meeting the requirement is obtained, then the rubber-coated surface is coated with a layer of adhesive, phosphating treatment is not needed, and through rubber injection molding and vulcanization, the requirement for effective bonding of the rubber-coated gear product and rubber is met, and meanwhile the indexes of high precision and hardness of the gear are met.