The invention relates to magnesia castable taking forsterite as a main raw material and a preparation method of the magnesia castable. The technical scheme is that the preparation method comprises thefollowing steps: uniformly mixing forsterite fine powder, magnesite fine powder, caustic-burned magnesia powder, quartz sand fine powder, silica powder, ferrosilicon nitride, magnesium citrate and thermosetting phenolic resin, molding, carrying out heat treatment at 900 to 1200 DEG C in a neutral atmosphere for 3 to 5 hours, crushing, carrying out ball milling and screening to obtain a ball abrasive with the particle size less than 0.088 mm and a granular material with the particle size of 0.088 to 0.25mm; uniformly mixing the silica powder, the ferrosilicon nitride, citric acid, elemental silicon powder, the forsterite fine powder, hydroxyethyl cellulose and water and carrying out ball milling to obtain slurry; uniformly mixing forsterite particles, magnesite particles, the granular material, the ball abrasive, the slurry, polyvinyl alcohol fiber and a water reducing agent, thus obtaining the magnesia castable with the forsterite as the main raw material. A product produced by the preparation method disclosed by the invention has high strength and excellent slag corrosion resistance.