The invention belongs to the technical field of building materials, and provides high-water-resistance gypsum-based decorative mortar and a preparation method thereof. The high-water-resistance gypsum-based decorative mortar is prepared by mixing gypsum, aluminate cement, superfine slag powder, latex powder, cellulose ether, a retarder, a defoaming agent, a water repellent, inorganic pigment and quartz sand. During preparation, the gypsum, the aluminate cement and the superfine slag powder are mixed, and then the rest raw materials are added and mixed. The decorative mortar has the advantagesof excellent physical and mechanical properties, controllable setting time and operable time, high softening coefficient, good water resistance, fast strength development, high strength, good bondingstrength, no shrinkage cracking problem, no efflorescence, stain resistance, good decorative effect and the like. The preparation method is simple, is suitable for decoration engineering of building interior walls, is especially suitable for a building wall internal thermal insulation and decoration integrated system, can ensure good performances in a short time, improves the construction efficiency, has excellent long-term use efficiency, and ensures the engineering quality.