The invention provides a colored pencil lead and a preparation method thereof. The colored pencil lead comprises components in parts by mass as follows: 62-73 parts of sodium thiosulfate, 13-20 parts of a color developing agent, 7-15 parts of CMC (carboxy methylated cellulose) and 0-8 parts of kaolin, wherein the color developing agent consists of sodium carbonate and an acid-base indicator. The preparation method of the colored pencil lead includes steps of weighing the raw materials in proportion, mixing sodium carbonate and the acid-base indicator, adding absolute ethyl alcohol dropwise and mixing to a heavy paste, then pouring molten sodium thiosulfate in and stirring evenly, adding CMC and kaolin, stirring evenly, pouring into a die, drying, and taking out. The provided colored pencil lead can fade both when the lead meets water and when the lead is placed in the air for a long time, is easy to wash when adhering to hands or clothes, is non-residual, non-toxic and harmless, and is suitable for occasions where long-stem storage is not needed, such as temporary marking, calligraphy and painting exercise, and the like.