The invention provides a fire-retardant high-ductility composite material and a manufacturing method thereof, which can solve the problems that halogen decomposes harmful gas, the material cost is high, the use range of the material is limited and the like existing in the prior art. The components of the composite material are weighed in parts by weight: 40-70 parts of modified ABS particle, 20-60 parts of PC, 3-8 parts of toughener, 12-20 parts of ammonium polyphosphate, 8-12 parts of polyfluortetraethylene, 1-5 parts of magnesium hydrate and 0.1-0.4 part of ethylene bis stearamide. The ABS content in the composite material is improved, the material impact property is improved, the cost is lowered, and a fire-retardant system is improved.