The invention provides a magnesium-lithium alloy used for sand mold casting and a preparing method of the magnesium-lithium alloy. The magnesium-lithium alloy comprises, by weight percent, 3%-10% of Li, 2%-7% of Al, 0.5%-3.5% of Zn, 0.5%-3% of Nd, 0.5%-3% of Ce, 0.05%-0.2% of Ti, 0.005%-0.05% of C and the balance Mg and inevitable impurities. The preparing method includes smelting and heat treatment. According to the magnesium-lithium alloy used for sand mold casting and the preparing method of the magnesium-lithium alloy, Li, Al and Zn serve as the main alloy elements and Nd, Ce, Ti and C are added, so that the solid solution strengthening effect of the magnesium-lithium alloy use for sand mold casting is improved, shrinkage porosity defects are reduced, the sand mold casting performance is improved, grain growth of the alloy in the sand mold casting process and the later solid solution process is inhibited, segregation of the Li element is reduced, and the yield of the Li element is increased. According to the magnesium-lithium alloy used for sand mold casting and the preparing method of the magnesium-lithium alloy, magnesium-lithium alloy grains are well refined on the premise that the alloy cost is not improved obviously, and the beneficial effects that the sand mold casting forming performance is good, the comprehensive mechanical performance is high, and the cost is low are achieved.