The present invention directs to a method of manufacturing low water peak single mode optical fiber, which comprises performing deposition in a substrate tube using PCVD technology, whereby a deposited layer of a certain construction design is formed on the inner wall of the substrate tube, melt contracting the substrate tube into a solid core rod according to melt contraction technology, producing an optical fiber preform by combining the core rod and a jacket tube of low hydroxyl content by means of RIT technology or by depositing an outer cladding on the outer surface of the core rod using OVD technology, sending the optical fiber preform into a fiber drawing furnace to draw it into an optical fiber, wherein: in the PCVD technology, the content of impurities in a gas mixture of raw materials, which is characterized by the infrared spectrum transmissivity thereof, is required to a transmissivity of 90% or greater, the water content in O2 is 100 ppb or less, the water content in C2F6 is 1000 ppb or less, the hydroxyl content of the substrate tube is 1000 ppb or less, the dynamic leak rate of a deposition machine is 1.0×10−5 mbar·l/s or less; during melt contraction of the substrate tube, the dynamic leak rate of a melt contraction machine is 1.0×10−5 mbar·l/s or less; the hydroxyl content of the jacket tube of low hydroxyl content is required to be 10 ppm or less; the relative humidity of environment during the process of manufacture is 25% or less; the ratio of the cladding diameter to the core layer diameter (b/a value) in the waveguide structure of the optical fiber is from 2.0 to 7.0.