The invention discloses biomass oil suitable for modifying thermosetting resin and a preparation method thereof. The biomass oil is prepared from the following raw materials in parts by weight: 150-350 parts of biomass briquette, 280-520 parts of reaction medium A, 30-120 parts of reaction medium B, 5-20 parts of catalyst C, 2-8 parts of catalyst D and 2-9 parts of neutralizing agent, wherein the reaction medium A is one or more of methanol, ethanol, butanol and glycerin; the reaction medium B is one or more of ethyl acetate, acetone, toluene and petroleum ether; the catalyst C is one or more of phenolsulfonic acid, p-toluenesulfonic acid, benzenesulfonic acid, phenyl phosphate and salicylic acid; the catalyst D is one or more of inorganic acids; and the biomass oil is prepared by the steps of charging, heating for reacting, cooling, separation and distillation. With relatively good quality indexes, the biomass oil does not need secondary processing and can be directly applied to the modification of thermosetting resin; and moreover, the preparation method is simple, the reaction conditions are mild, and the production cost is reduced.