The invention relates to a heat conduction insulating casting glue and a preparation method thereof. The casting compound comprises the following main components in parts by weight: (A) 100 parts of hydantoin epoxy resin, (B) 60-120 parts of anhydride curing agent, and (C) 200-400 parts of inorganic heat conductive filler, wherein the component A (per 100 weight parts) contains 10-15 weight partsof alcohol plasticizer; the component B is one or more of hexahydrophthalic anhydride, tetrahydrophthalic anhydride, methyltetrahydrophthalic anhydride, methylhexahydrophthalic anhydride and methylnadic anhydride; and the component C is one or more of silica micropowder, aluminum oxide, aluminum nitride and boron nitride in 300-900 meshes. The preparation method of the casting compound comprises the following steps: mixing A and B proportionally; soaking C in ethanol solution of silane coupling agent, dispersing at a high speed, filtering, and oven-drying; heating the mixture of A and B, adding C, mixing, and debubbling; and casing, and curing. The casting compound provided by the invention has low viscosity, greatly improved heat-conducting property and improved mechanical properties, and is convenient in casting. The preparation method of the casting compound is solvent-free, and has no pollution to the environment.