The invention discloses a preparation method of magnesium-based high-sulfur free-cutting steel. The magnesium-based high-sulfur free-cutting steel comprises the following chemical components in percentage by mass: 0.05-0.50% of C, less than or equal to 0.40% of Si, 1.0-1.7% of Mn, less than or equal to 0.08% of P, 0.15-0.35% of S, 0.0003-0.0020% of Mg, less than 0.0030% of O and the balance of iron and inevitable impurities. A production process comprises the steps of converter or electric furnace smelting, LF refining, continuous casting and rolling, magnesium-containing cored wires are addedat the final stage of refining, the degree of superheat is controlled before wire feeding, the total oxygen content is not higher than 30 ppm, and an intermittent feeding method is adopted. The wirefeeding process is stable, violent splashing is avoided, and the yield of the magnesium element is higher. The product prepared by the preparation method has excellent cutting performance and remarkably improved cutting breaking performance and the abrasion resistance of cutters. The cost of each ton of steel is increased by not more than 10 yuan, and the price advantage is obvious.