The invention discloses an inorganic powder highly filled polyvinyl alcohol composite material, which consists of the following components in parts by weight: 10-60 parts of polyvinyl alcohol, 30-80 parts of inorganic powder, 5-30 parts of plasticizing agent and 5-15 parts of flow modifying agent. Further, the composite material has the tensile strength of 17.0-75.0 MPa and the breaking elongation of 70-450%, and the melt viscosity is 1.0*10<2> to 5.0*10<3> Pa s at 180 DEG C when the shearing rate is 10<2>-10<3> s<-1>. The invention further discloses a preparation method of the inorganic powder highly filled polyvinyl alcohol composite material. By using the inorganic powder highly filled polyvinyl alcohol composite material and the preparation method, not only can inorganic powder highly filled polyvinyl alcohol be realized, the cost of the composite material be greatly reduced, but also the flowability of the composite material can be guaranteed; the favorable thermoplastic processing of the composite material is realized; the obtained composite material is excellent in combination property; products such as a fiber, a sheet and a thin film can be prepared through a routine thermoplastic processing method; and the inorganic powder highly filled polyvinyl alcohol composite material is used for the fields of writing paper, printing paper, instrument and meter packaging films, wallpaper, heat-insulating gaskets, toys and the like. The preparation method provided by the invention is simple in process and short in flow and industrial production is easy to realize.