The invention provides a method for preparing compound powder of alumina and chrome oxide from chromium-containing aluminum sludge. The method comprises that contents of Al, Cr, and Fe in the chromium-containing aluminum sludge are weighed, an inorganic acid solution is added according to the contents, and the mixture is heated and stirred until the mixture is completely dissolved; or that the chromium-containing aluminum sludge is heated, the inorganic acid solution is added, and the mixture is stirred while maintaining the temperature till the mixture is completely dissolved; that a required reducing agent is calculated and then added for reaction, after which the solution is kept stand and cooled; that the pH value of the solution is adjusted to 2.5-3.5, the solution is filtered to remove impurities, a liquid dispersant is added to mix the solution evenly, the PH value of the solution is then adjusted to 5.0-7.8 to generate a mixed deposition, the solution is filtered after full settlement to obtain a filtrate and a filter cake, the filter cake is washed till a washing solution contains no Cr(VI), and the washing solution is added into the filtrate; that the washed filter cake is dried; and that the object product is obtained by crushing, grinding and calcining. The method fundamentally solves environmental pollution of the chromium-containing aluminum sludge, and comprehensively utilizes the chromium-containing aluminum sludge. The method is simple in reaction processes and has no by-products, and products of the method are easy to control and reach nano-level granularity. Thus, the method can be used for producing grinding materials, cutting tools and refractory materials.