The invention relates to an inorganic thermal insulation and decoration mortar, which is characterized by comprising the following components in parts by weight: 180-220 parts of cement, 40-60 parts of flyash, 560-600 parts of sand, 50-70 parts of heavy calcium carbonate powder, 70-100 parts of inorganic lightweight aggregate, 3-9 parts of bentonite, 4-8 parts of wood fiber, 2-7 parts of moisture repellent, 2-5 parts of saltpetering inhibitor, 0.5-4 parts of cellulose ether, 6-15 parts of rubber powder and 1-30 parts of pigment. The preparation method is implemented as follows: evenly mixing the cement, flyash, sand, heavy calcium carbonate powder, bentonite, wood fiber, moisture repellent, saltpetering inhibitor, cellulose ether, rubber powder and pigment, adding the inorganic lightweight aggregate, and carrying out mechanical mixing uniformity to obtain the product in the invention. The mortar in the invention has the advantages of thermal insulation, strong hydrophobicity, fire resistance, environment protection, no pollution, same duration with buildings and the like.