The invention discloses a Y-Fe-based rare-earth hydrogen storage material and a preparation method thereof. The component composition of the hydrogen storage material is Y1-xMxFe3-yNy, wherein x is not less than 0 and not greater than 0.5; y is not less than 0 and not greater than 1.5; M is one or more than two of La, Ce, Pr, Nd, Sm, Gd, Zr, Ti and Mg; and N is one or more than two of Ni, Co, Al,Mn and Ca. The preparation method thereof comprises the following steps: (1) material preparation: weighing pure metals or the alloys thereof according to the chemical composition components separately, carrying out cleaning treatment on the raw materials, and then carrying out roasting degassing; (2) smelting: smelting through a vacuum medium-frequency induction smelting furnace or a vacuum electric-arc furnace; (3) pouring: rapidly condensing to obtain a cast ingot in a manner of water-cooling die pouring or vacuum suction casting; and (4) crushing the cast ingot under the protection of argon gas atmosphere, and sieving to obtain a particle powder with a particle size of 30-40 meshes. The hydrogen storage material disclosed by the invention is low in activation temperature, high in hydrogen absorption speed, and applicable to many fields of energy storage, hydrogen purification and the like. Compared with La-Ni-series hydrogen storage materials, Fe is lower in price fluctuation thanNi and lower in material cost.