The invention discloses a yield increasing and insect pest prevention slow-release fertilizer for rice, and a preparation method thereof, wherein the raw materials comprise, by weight, straw powder, animal manure, plant ash, weathered coal, urea, thiourea, magnesium potassium sulfate fertilizer, calcium superphosphate, phosphorite powder, polyacrylamide, sodium polyacrylate, kaolin, borax, lime powder, dicyandiamide, 3,4-dimethylpyrazole phosphate, N-(n-butyl)thiophosphoric triamide, a microbial agent, potassium fulvate, oxalic acid, xylitol residue, citrus residue, bamboo fiber, sodium dodecyl benzene sulfonate, and a microbial fermentation antibacterial agent. According to the present invention, the yield increasing and insect pest prevention slow-release fertilizer has characteristics of reasonable formula and rich nutrition, can improve the stress resistance of rice, can reduce the incidence of rice pests and diseases, can reduce the fertilizer application cost, can effectively improve the ecological environment of farmlands, can significant improve the yield of rice, and can improve the quality of rice, wherein the nutrient release rate in the fertilizer is basically consistent with the fertilizer requirement law of rice.