The invention discloses colored kraft paper and a production method thereof. The production method comprises the following steps: pulping waste paper, screening, purifying, floating, concentrating, dewatering, carrying out heat dispersion, and bleaching to obtain waste paper deinked pulp; mixing the waste paper deinked pulp with beaten commercial softwood pulp; and desanding, blending (including color mixing), screening, purifying, carrying out net shaping, squeezing, drying, calendering, winding, rewinding, and packing, wherein the absolute dry mass ratio of the waste paper deinked pulp to the commercial softwood pulp is 70-80%:20-30%. The colored kraft paper produced by the method has high physical strength, low production cost and good tissue evenness, the color of the paper can be adjusted in accordance with user preferences by adding dyes, and the appearance quality is obviously improved; as the used waste paper pulp is subjected to TCF (Total Chlorine Free) bleaching in the pulping process, organic halides (AOX) and dioxin which are difficult to biodegrade can not be produced in the production process, thereby having the advantage of realizing clean production; and 70% of regenerated fibers are used to reduce the consumption of virgin fibers, thereby saving wood and being environment friendly.