The invention discloses a method for preparing a microbial compound organic fertilizer from domestic sludge. The method comprises the following steps: adding 80-150 parts of straws, 300-500 parts of sawdust, 30-60 parts of bean dregs, 20-30 parts of oil cakes and 30-60 parts of excrement residues into 650-800 parts of sludge; adding 4-7 parts of functional composite microbial strains, and uniformly stirring; carrying out static fermentation for 24-36 hours; carrying out high temperature overturning fermentation, wherein the temperature is kept at 60-70 DEG C, the water content is 48%-52%, and the mixture is turned over once every 12-24 h and is totally turned over for 7-10 times; carrying out low temperature overturning fermentation, wherein the temperature is kept at 35-50 DEG C, the water is reduced gradually by 2-4% each time, and the mixture is turned over once every 12-24 h and is totally turned over for 5-8 times; and drying and cooling the fermented material until the water content is lower than 30% to obtain the powdery microbial compound organic fertilizer. By adjusting the proportion of the domestic sludge, the organic waste and the functional microbial agent and controlling the fermentation mode, the fermentation temperature, the fermentation humidity and the fermentation time in the fermentation process, the prepared microbial compound organic fertilizer contains various functional bacteria and trace elements, the quality and the yield of crops, fruits, vegetables and tea can be remarkably improved, and the environment of the planting soil is conditioned and improved.