The invention discloses powder for laser cladding in-situ self-generated vanadium carbide reinforced iron-based alloy and a preparation method. The alloy powder prepared by a vacuum gas atomization method comprises, by mass, 4.00%-4.40% of C, 16.00%-18.00% of V, 8.00%-10.00% of Cr, 0.90%-1.30% of Si, 1.00%-2.00% of Mo, 0.90%-1.20% of Mn, 0.40%-0.70% of Ni, 0.30%-0.50% of Al, P, S, less than or equal to 300 ppm of O, and the balance Fe, wherein the total mass fraction of P and S is less than or equal to 0.03%. The preparation method comprises the steps that the alloy powder clads the surface oflow-carbon alloy steel base material through laser by adopting a CO2 laser processing system in a synchronous powder feeding mode, the cladding-layer powder absorbs laser energy to form a molten poolon the surface of the base material, a C element and a V element in the molten pool react to generate an in-situ self-generated V8C7 ceramic reinforced phase, and meanwhile, the cladding layer and the base material form good metallurgical bonding. By preparing the in-situ self-generated V8C7 particle reinforced iron-based alloy laser cladding layer, the hardness and the wear resistance of the surface of a low-alloy steel component can be remarkably improved, and the method can be widely applied to laser manufacturing and remanufacturing of mechanical parts under friction and wear working conditions in the industrial field, and has remarkable economic and social benefits.