The invention discloses an iron oxide red pigment and a preparation method thereof. The preparation method comprises the specific steps that 1, acidic waste water generated after production of titanium dioxide pigments or acidic waste water in an iron and steel plant is adopted for preparing a ferrous sulfate solution; 2, the ferrous sulfate solution is diluted with water, a dispersion agent and caustic soda liquid are added, air is introduced, air is maximized, the pH value of the feed liquid is controlled to range from 9 to 12, an oxidizing reaction is carried out till the color is brownish red, and an iron oxide red seed crystal solution is prepared; 3, the iron oxide red seed crystal solution is added, the pH value is adjusted to range from 5 to 8, the ferrous sulfate solution is added, heating is carried out, air is introduced, when the temperature ranges from 60 DEG C to 80 DEG C, the caustic soda liquid is continuously and evenly added into a reactor dropwise, the pH value is controlled to range from 2.5 to 3.5 till the feed liquid is fermented into a yellowish red phase, the temperature is controlled to range from 80 DEG C to 85 DEG C at this moment, the pH value is controlled to range from 3.5 to 4.5, the oxidizing reaction is carried out for 16-30 hours, and the iron oxide red pigment is prepared. The method is environmentally friendly, and the product is fine and even in particle and bright in color.