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This invention relates to a method for preparing a water-soluble yellow reactive dye, comprising: adding water and ice to 2-naphthylamine-3,6,8-trisulfonic acid and slurrying, followed by a diazotization reaction to obtain a diazo material; adding water and ice to m-ureidoaniline, adding an alkali agent, and stirring to dissolve and obtain a clear m-ureidoaniline solution; adding the diazo material to the clear m-ureidoaniline solution and performing a coupling reaction at a controlled temperature to obtain a yellow base; adding water and ice to cyanuric chloride, adding dispersant CS and dispersant MF and slurrying, then adding sodium 2,4-diaminobenzenesulfonate and mixing and slurrying, with staged heating and pH adjustment to react and obtain a bicondensed material; adding the yellow base to the bicondensed material, heating and adjusting the pH, and performing a controlled reaction to obtain a dye slurry. The preparation method provided by this invention features high chroma conversion rate, short production cycle, and reasonable and efficient process, resulting in a product with excellent solubility, high fixation rate, good storage resistance, and bright color.