The invention discloses a vertical LED adopting an insulating medium barrier layer and a preparation method thereof. A lower electrode is formed on the lower surface of a radiating substrate, and a lower welding metal is formed on the upper surface; a p-type ohmic contact reflecting metallic film is formed on the lower surface of the extension of GaN base ; parts of region on the lower surface ofthe reflecting metallic film are covered with an insulation dielectric film; a upper welding metal is respectively formed on the lower surface of the insulation dielectric film and bare parts of lower surface of the reflecting metallic film; the extension of the GaN base is connected with the radiating substrate by an upper welding metal and the lower welding metal of the radiating substrate; andan upper electrode is formed on the upper surface of the extension of the GaN base. The Ag surface of the reflecting mirror adopts the insulation dielectric film instead of metal material as a barrier layer, which prevents Ag from affecting by other metal heat diffusion; simple electric conduction hole design can realize vertical electricity conduction and realize lower p contact pressure drop ofa vertical diode. Compared with a vertical diode adopting a metal barrier layer, the vertical diode produced with the method of the invention has lower forward working voltage and higher luminescent efficiency.