The invention relates to a multifunctional compound fertilizer capable of killing pests, preventing diseases and increasing yield. The preparation method of the multifunctional compound fertilizer comprises the following steps: firstly, respectively preparing a component A, a component B and a component C, wherein the component A is a vegetable insecticide, thecomponent B is a vegetable bactericide, and the component C is a vegetable growth promoting and yield increasing agent; after the three components are prepared, adding the finished product of the component C into a synthesis kettle for heating; then, sequentially adding the liquid medicine of the component A and the liquid medicine of the component B for continuously stirring, and keeping constant temperature; adding a penetrating agent JFC and polyethylene glycol into the synthesis kettle for stirring; and finally, adding a buffering agent for stirring and mixing uniformly, and homogenizing the mixture by a high-pressure homogenizer to obtain the finished product of the multifunctional compound fertilizer. The multifunctional compound fertilizer of the invention has very high insecticidal and bactericidal efficiencies, smaller toxic side effects and safety to people and livestock, promotes the growth and the development of plants, increases the chlorophyll content, and greatly improves the crop yield.