The invention discloses a damp-proof water-retention compound fertilizer and a preparation method thereof. The damp-proof water-retention compound fertilizer is prepared from, by weight, 20-22 parts of urea, 12-15 parts of coconut chaff, 8-10 parts of sphagnum, 8-10 parts of illite, 8-10 parts of tea shell powder, 3-5 parts of an EM fungicide, 20-30 parts of brewing waste liquid, 10-12 parts of fruit wine residues, 3-5 parts of fructus toosendan powder, 3-5 parts of crofton weed, 18-20 parts of sodium humate, 2-3 parts of aluminium potassium sulfate, 14-16 parts of monopotassium phosphate, 3-5 parts of cellulose acetate, 10-12 parts of chitosan, 6-8 parts of shell powder, 6-9 parts of polylactic acid, 8-12 parts of polyvinyl acetate, 0.5-1 part of N,N-methylene bisacrylamide and a proper amount of water. The coconut chaff, the sphagnum, the tea shell powder and other ingredients are added to the damp-proof water-retention compound fertilizer, the compound fertilizer has a damp-proof effect while nutrition is increased, and accordingly the phenomenon that the fertilizer very easily cakes or melts into liquid to run off after being affected with damp or stained with water and then the fertilizer efficiency is severely affected is effectively prevented.