The present invention provides a method for preparing a zirconium oxide refractory fiber. The method adopts zirconium oxychloride, aqueous hydrogen peroxide solution, yttrium chloride or yttrium nitrate as raw material, the inorganic zirconium spinnable glue solution is made by reaction and compression, the gelatinous fiber can be obtained by centrifugal fiber forming, and after heat treating sintering the zirconium oxide refractory fiber which has the following advantages can be obtained: crystal phase composition with square phase and/or cubic phase zirconium oxide, purity up to 99.5% above, diameter around 5 mu m, length approximate continuous, soft and flexible property and without slag including sphere. The using temperature of the fiber is above 1600 DEG C, the material can be used as extreme temperature refractory, heat insulation material, protecting material, ablative material, satellite battery separator material and the like, used for the fields of aerospace, war industry and national defense, atomic energy and the like; the fiber can also be used as the flame-proof heat-insulating material of the extraordinary high-temperature electric furnace with temperature 1600 DEG C to 2200 DEG C, the oil or gas burning furnace and other extraordinary high-temperature heating mechanism, and is used for the fields of ceramic sintering, crystal growth, metal smelting, petroleum cracking, scientific researching and the like. The invention totally adopts the inorganic raw material, has the advantages of low cost, no pollution, simple technique and excellent effect.