The invention belongs to the technical field of deep processing of spirulina, and discloses a spirulina small molecule peptide biscuit and a preparation method thereof, and a wall breaking technology is adopted to extract small molecule peptide from spirulina mud through physical wall breaking, fishy smell removal, decoloration, heavy metal removal, composite enzymatic hydrolysis, desalination and concentration, and spray drying; and preparing materials, kneading dough, fermenting, rolling the dough, forming, baking, brushing oil, cooling and packaging to obtain the spirulina micromolecule peptide baked biscuit. The instant spirulina powder, the wheat flour and the like are added, so that the cost is reduced, the taste is improved, the instant spirulina powder is more suitable for being used as food of the public, the instant spirulina powder has a wider consumer market, the bottleneck problem of a spirulina food production and processing technology is solved, the demand quantity of spirulina is increased, and the current situation that the production supply of spirulina raw materials exceeds the demand is solved; the enthusiasm of farmers for culturing the spirulina is improved, great influence on the development of the spirulina culture processing industry is generated, a new way for developing spirulina resources is opened up, and the product is nutritional, practical and good in market prospect.