The invention relates to a magnetic yarn and a preparation method thereof, in particular relates to a high-magnetism yarn and a preparation method thereof, belongs to functional yarns. The high-magnetism yarn is prepared by taking an operation line as a core line and medical polyurethane as a skin layer and adsorbing a nano magnetic iron oxide powder layer on the outer surface of the core line. The magnetic yarn preparation method comprises the step of adsorbing a magnetic nano iron oxide powder layer on the outer surface of the core line by taking an operation line as a core line and medical polyurethane as a skin layer, wherein the magnetic nano iron oxide powder layer is 50-300nm thick, the grain size of the magnetic nano iron oxide powder is 20-50nm, the skin layer is coated outside the magnetic nano iron oxide powder layer and is 10-50nm thick. The invention aims at providing a magnetic yarn which is applicably fixed on a biological micro device, has high magnetic intensity and bioinert, and can also meet the mechanical strength requirement, and the magnetic yarn is used for braiding a magnetic line screen.