The invention discloses a high-flexibility insulating sheath material for a transformer and a preparation method thereof. The high-flexibility insulating sheath material is prepared from 50-70 weight parts of acrylate rubber, 30-40 weight parts of polyurethane rubber, 15-20 weight parts of nylon 66, 10-15 weight parts of di(2-ethylhexyl)-4,5-epoxycyclohexane-1,2-dicarboxylate, 8-12 weight parts of nylon acid dioctyl ester, 5-10 weight parts of chlorinated paraffin, 10-15 weight parts of aluminum hydroxide, 5-10 weight parts of zinc borate, 15-25 weight parts of carbon black N660, 8-12 weight parts of magnesium carbonate, 5-10 weight parts of quartz powder, 10-15 weight parts of nanometer fluorite powder, 4-8 weight parts of mineral oil, 2-3 weight parts of zinc oxide, 1-2 weight parts of calcium stearate, 1-2 weight parts of barium stearate, 1-2 weight parts of an antiager ODA, 2-3 weight parts of an antiager DNP, 1-2 weight parts of a promoter NA-22, 1-2 weight parts of a promoter CZ, and 3-6 weight parts of a composite filling material. The high-flexibility insulating sheath material has good flexibility, high toughness and good stretching and aging resistance, can resist long-term bending motion, has excellent tension resistance, and has excellent performances such as heat resistance, weather resistance, acid and alkali corrosion resistance, electrical insulating property and tear strength.