The invention discloses a paper starch adhesive and a preparation method thereof. The paper starch adhesive comprises the following components in part by weight: 100 parts of starch, 300 to 600 parts of water, 0.1 to 0.3 part of potassium hydrogen peroxymonosulfate, 5 to 10 parts of caustic soda, 1 to 5 parts of epoxy chloropropane, 0.5 to 1.5 parts of boric acid, 1 to 3 parts of sodium sulfite, 4 to 8 parts of light calcium carbonate and 2.5 to 5 parts of bridging agent. The preparation method comprises the following steps of: adding water into a reaction kettle, heating the water to 38 DEG C, adding the starch into the water, stirring the solution, adding potassium hydrogen peroxymonosulfate solution into the reaction kettle, and reacting the mixed solution for 20 minutes with stirring; diluting the caustic soda, then slowly adding the caustic soda into the reaction kettle twice, stirring the solution for about 20 minutes to form milk white or light yellow transparent colloid, then adding the boric acid, the bridging agent and the light calcium carbonate into the colloid, and stirring the mixture uniformly; and adding the epoxy chloropropane, sodium aliphatate and the sodium sulfite into the reaction kettle with stirring, and stirring the mixture uniformly to obtain the paper starch adhesive. The adhesive has the characteristics of stable viscosity, good adhesiveness, low comprehensive cost, good permeability and the like.