The invention discloses a high Fe content Al-Mg2Si alloy prepared by laser selective melting and a preparation method. The Al-Mg2Si alloy is formed by Al-Mg2Si alloy raw material powder through a laser selective melting technology, the Al-Mg2Si alloy is composed of the following components by mass percentage: 5-5.5% of Mg, 2-2.2% of Si, 0.4-0.6% of Mn, 1-3% of Fe and the balance of aluminum, and the total mass percentage is 100%. According to the invention, the high Fe content Al-Mg2Si alloy is prepared by the laser selective melting technology skillfully, through using the characteristic thatthe cooling rate in the laser selective melting technology can reach 105-108 k/s, after alloy raw material powder is melted, the alloy is in non-equilibrium solidification at an extremely fast cooling rate, alloy elements are uniformly distributed, all elements have no segregation, and (Al+Mg2Si) ultrafine eutectic structures are uniformly formed, meanwhile, the formation of coarse Fe-rich intermetallic compounds is inhibited, fine Fe-rich intermetallic compounds are uniformly dispersed, and the high Fe content Al-Mg2Si alloy with excellent mechanical properties is obtained.