The invention provides a method for preparing a Y type molecular sieve containing rare earth, which comprises the following steps of: firstly, carrying out alkali treatment and modification on the raw material Y type molecular sieve; and then carrying out ion exchange on the molecular sieve subjected to alkali treatment or further carrying out hydrothermal ultrastable treatment to obtain the rare-earth Y type molecular sieve or the rare-earth ultrastable Y type molecular sieve. The alkali treatment condition comprises the steps of pulping and uniformly mixing a Na Y type molecular sieve with an alkali solution according to the mass ratio of Na Y(dry basis): alkali:H2O=(0.1-2):(0.05-2):(4-15) and carrying out alkali treatment on the molecular sieve at 0-120 DEG C for 0.1-24 hours. A catalytic cracking reaction evaluating result displays that the rare-earth Y type molecular sieve and the rare-earth ultrastable Y type molecular sieve obtained by the modification of the method are catalysts prepared by active components and have high microreactivation when used for heavy oil cracking.