The invention discloses an epitaxial wafer of a GaN-based light emitting diode, and a manufacturing method thereof, and belongs to the technical field of a semiconductor. The epitaxial wafer comprises a substrate, a buffer layer growing on the substrate, an N-type gallium nitride layer, a multi-quantum well layer, a composite layer and a P-type gallium nitride layer. The composite layer comprises multiple periods, the composite layer in each period comprises an insertion layer and an electron barrier layer, from one side of the multi-quantum well layer, the insertion layer and the electron barrier layer are arranged to be successively stacked, and the insertion layer is a zinc oxide layer doped with an Al element. According to the invention, the ZnO insertion layer doped with the Al element becomes an accumulation layer of carriers, the carriers after accumulation are quickly spread in a two-dimensional plane, the antistatic breakdown capability is enhanced, the electron barrier layer can effectively block electron overflow, the mismatch ratio of ZnO and the crystal lattice of a quantum barrier layer employing a GaN layer in the multi-quantum well layer is quite small, the crystal lattice mismatch defect can be effectively avoided, the carrier injection efficiency is improved, and the luminescence efficiency of the light emitting diode is enhanced accordingly.