The invention relates to a magnetic water-soluble fullerene, and a preparation method and application thereof. The invention effectively solves the problems of low water solubility, low compatibility and poor targeting property of the fullerene. The method comprises the following steps: dissolving fullerene in toluene, adding sodium hydride and diethyl bromomalonate, stirring in a nitrogen protective atmosphere to remove sodium hydride and toluene, adding the dried diethyl-bromomalonate-substituted fullerene into the toluene, hydrolyzing until the toluene phase becomes colorless, adding concentrated hydrochloric acid, filtering to obtain a filter cake, removing insoluble substances and methanol, drying to obtain malonic-acid-substituted fullerene, dissolving in an ethylene glycol and di-acetal mixed solvent, adding sodium acetate and ferric iron salt to react, washing, drying to obtain ferroferric-oxide-carried fullerene, carrying out ultrasonic dispersion on the ferroferric-oxide-carried fullerene, amino water-soluble substance and EDC.HCl in phosphate, reacting in a dark place, carrying out vacuum filtration, and drying to obtain the magnetic water-soluble fullerene. The magnetic water-soluble fullerene has the advantages of favorable magnetic targeting propertt, strong water dispersity, low toxicity for organisms, high physical and chemical stability, good quality and low cost.