The invention relates to a type of cotton and spun silk segment-color yarn and a production method thereof. The cotton and spun silk segment-color yarn comprises colored decorative yarn and white base yarn, wherein the colored decorative yarn is spun silk yarn, and the white base yarn is pure cotton yarn. The process comprises the following steps that scouring, opening and carding are carried out on spun silk raw materials, then, combing is carried out, four drawing is carried out so that spun silk drawn slivers can be made, the spun silk drawn slivers are cut into spun silk fibers with a fiber cutting-off machine, the average length of the spun silk fibers ranges from 28 mm to 35 mm, dyeing is carried out, and colored spun silk roving is made through roving; cotton fibers is processed through opening picking, carding, combing, drawing and roving to form white cotton roving; in the working procedure of spun yarn, the spun silk serves as the colored decorative yarn, cotton serves as base yarn, and spinning is carried out to form the cotton and spun silk segment-color yarn. By the adoption of the process, resource allocation is fully utilized, the cotton fibers serve as the main body of the yarn, the expensive spun silk is used for forming colored segments, the production of the high value-added cotton and spun silk segment-color yarn is achieved, and the product profit is increased.