The present invention discloses a chili sauce and a production method thereof, belonging to the technical field of food processing. The chili sauce is made of the following components: line peppers and capsicum annuum, dried chili powder, scallion, ginger, garlic, bean paste, star anise powder, Chinese red pepper powder, salt, monosodium glutamate, soybean oil, white sugar, disodium 5'-ribonucleotide, chicken essence powder, D-sodium isoascorbate, maltol, Chinese red pepper oil, chili oil, beef oil and potassium sorbate. The chili sauce is prepared by brewing the fresh peppers, dried chili powder, Chinese red pepper powder, star anise powder and other raw materials in the soybean oil, which not only ensures the products to have fresh red color and luster, but also keeps the intact structure morphology of the chili fruits, and thus the products have good shape, color and luster, are attractive, and can improve appetite. After the chilies are fried in the oil until the chilies are well-done, the chilies have thick meat texture, do not get soft, and are fragrant and crisp and tasty. Besides, the fermentation time is reduced, and thus the shelf-life is extended. The chili sauce can significantly promote appetite.