The invention provides a method for preparing a strontium ferrite magnetic powder with high specific saturation magnetization and high coercive force. Nitrates and chlorides of Sr, R Fe and M with limited amounts are dissolved, added with citric acid and ammonia gas to adjust the solution obtained to neutral or slightly alkaline so as to prepare sol; the sol is heated and evaporated to prepare gel, a precursor is prepared by self-propagating combustion, and the magnetic powder is obtained by calcining the precursor at a low temperature. In the composition, R is at least one of Y, La, Pr, Nd and Ce, and M is at least one of Co, Ni, Zn, Cu and Mn. In the method, the magnetic powder can be obtained by mixing, ball milling, calcining, fine grinding and annealing the precursor obtained by self-propagating combustion and at least one of the nano-grade SiO2, CaCO3, B2O3, SrSO4, Al2O3 and Cr2O3. The magnetic powder prepared by the technology has the specific saturation magnetization of 71-75emu/g and the coercive force of 5.5-6.5kOe. The magnetic powder is suitable for preparing bonded permanent magnets and automobile motor magnets requiring high magnetic property.