The invention relates to a bismuth-containing lead-free free-cutting deformation zinc alloy and a preparation process thereof. The bismuth-containing lead-free free-cutting deformation zinc alloy comprises the following components in weight by percent: 8 to 12 percent of aluminum, 0.6 to 1.5 percent of copper, 0.03 to 0.1 percent of magnesium, 0.1 to 0.8 percent of bismuth, zinc and unavoidable foreign matters, wherein the content of the foreign matters is less than or equal to 0.05 percent. The alloy has excellent cutting performance and good mechanical property and processing formation property, is easy to realize the squeezing formation, is easy to obtain the raw material, is free from containing lead, is environment-friendly, has good corrosion resistance, is free from apparent intercrystalline corrosion trend, has high alloy size stability, can substitute the expensive copper alloy to be applicable to the bath articles and other industrial products, has promising application prospect and can substitute the lead brass. The invention also provides a preparation process of the bismuth-containing lead-free free-cutting deformation zinc alloy. The preparation process is simple andfeasible and saves the energy.