The invention relates to a preparation method of conductive carbon paste with water solubility and PTC function. The method comprises the following steps of: first step: carrying out preparation of the carbon paste; adding 40 percent to 60 percent of deionized water into 24 percent to 40 percent of bicomponent polyurethane, uniformly mixing, adding 10 percent to 20 percent of carbon powder, adding dispersing agent and uniformly stirring; second step: carrying out preparation of PTC functional material; taking 30 percent to 50 percent of deionized water, adding 2 percent to 4 percent of matrix wetting agent 500, 10 percent to 20 percent of ethylene glycol monomethyl ether and 3 percent to 5 percent of emulsifying agent; adding tween and uniformly mixing; then adding stearic acid, monoglyceride and glycerin, heating to 80 DEG C, uniformly stirring, homogenizing, emulsifying, reducing temperature to 35 DEG C, and filtering for spare; and third step: carrying out the preparation of conductive carbon paste with water solubility and PTC function, taking 100 parts by weight of conductive carbon paste and 30 to 60 parts by weight of PTC functional material, and mixing and stirring; and taking 0 percent to 4 percent of defoaming agent which is put into conductive carbon paste with PTC function in stirring and uniformly stirring. The method has simple operation, loose preparation conditions, wide material obtaining, no toxicity and no pollution; and the product thereof has excellent conductivity, safeness, reliability and wide application.