The invention discloses a polycarboxylic water reducer with viscosity reducing and slump retaining functions, and a preparation method thereof, and belongs to the technical field of building materials. The polycarboxylic water reducer is prepared through the following steps: free radical polymerization of an unsaturated polyether monomer I, an unsaturated block modified polyether monomer II, an unsaturated carboxylic acid monomer, an unsaturated carboxylic acid alkyl ester, an unsaturated phosphate ester monomer, a chain transfer agent, an oxidant, a reducing agent and deionized water in an aqueous solution at 15-30 DEG C, addition of an alkali solution to adjust the pH value, and water supplementation. The water reducer can meet the requirements of the water-reducing and slump-retaining performances of high-strength concrete, and also can greatly reduce the viscosity of the concrete and significantly improve the working performances of the high-strength concrete, so the problems of fast slump loss and excessive viscosity of existing polycarboxylic water reducers are solved. The preparation method can be carried out at normal temperature without a heat source, so the preparation method has the advantages of simple production device, reasonable process, simplicity in operation, high production efficiency, and suitableness for industrial production and promotion.