The invention discloses a water-based inorganic interior wall coating and a preparation method thereof, the coating comprises the following raw materials: water, silica sol and diatomite; wherein thecontent of silicon dioxide in the silica sol is 25-30%, the particle size of silicon dioxide particles is 8-10 nm, and the pH value of the silica sol is 8-11; and the coating further comprises a negative ion source material, a stabilizer and a silane coupling agent, and also comprises pigments and fillers, a thickening agent, water-based bentonite, a pH regulator, a functional assistant and a resin emulsion. The inorganic interior wall coating takes the silica sol as a main film-forming material, and is good in environmental protection property and good in fireproof flame retardancy, the resinemulsion is taken as an auxiliary film-forming material to improve the flexibility of the coating, and meanwhile, the inorganic interior wall coating contains the nano titanium dioxide, the diatomite, negative ion powder and other functional materials, so that the coating has the functions of degrading and adsorbing harmful substances, adjusting indoor air humidity, releasing negative ions and the like; the coating is capable of inhibiting the growth of fungi and algae due to the alkalinity of the coating, so that the wall surface is kept clean.