The present invention discloses a gypsum building block produced from a regenerated aggregate and gypsum, and a production method thereof, and belongs to the field of building materials, wherein a regenerated aggregate and gypsum are adopted as main raw materials, and a fiber-reinforced material, an air entraining agent, a waterproofing agent and a gypsum retarder are doped to improve the comprehensive performance of the gypsum building block. The production method is characterized in that the regenerated aggregate is a coarse and fine particulate matter obtained by carrying out a processing treatment on building waste, the gypsum has advantages of good fire resistance and good sound insulation, the mixed material is added with the fiber-reinforced material and the air entraining agent capable of producing dispersed tiny gas bubbles in the building block during production, and the gypsum retarder and the waterproofing agent are added. According to the present invention, the gypsum building block completely utilize the building waste so as to provide characteristics of low cost, resource saving and environmental protection, and further has characteristics of high strength, fire resistance, sound insulation, water resistance, excellent durability and other the like.