The invention provides a medical foam dressing and a preparation method thereof. The medical foam dressing comprises base cloth, a colloid layer and a peeling-off layer, wherein the colloid layer is arranged on the base cloth, the peeling-off layer is arranged on the colloid layer, and the colloid layer comprises alginate, polyurethane foam, gelatin, carboxymethyl chitosan, carboxymethyl cellulose sodium, rosin resin, kaolin and vegetable oil. The preparation method comprises the following steps: melting the polyurethane foam, the rosin resin and the vegetable oil in a reaction kettle, adding the rosin resin after the polyurethane foam, the rosin resin and the vegetable oil are completely melted, and performing heat preservation; uniformly mixing the alginate, the gelatin, carboxymethyl chitosan, carboxymethyl cellulose sodium and kaolin, slowly adding the alginate, gelatin, the carboxymethyl chitosan, carboxymethyl cellulose sodium and kaolin which are uniformly mixed to the reaction kettle, after uniformly mixing, lowering the temperature, and defoaming; uniformly coating mixtures to the base cloth, lowering the temperature, and covering the peeling-off layer on the coated colloid layer so as to obtain the medical foam dressing. The medical foam dressing disclosed by the invention has favorable mechanical and physical properties, the preparation technology is simple, the cost is low, and the industrialization is easy to realize.