The invention relates to a preparation method of modified vanadyl sulfate electrolyte. The preparation method comprises the steps of extracting a vanadyl sulfate solution, inorganically reducing the vanadyl sulfate solution, preparing a mixed extracting agent, performing reverse extraction on vanadyl sulfate, organically reducing a vanadyl sulfate reverse extracting solution, concentrating a vanadyl sulfate electrolyte precursor and the like, so that the high-purity vanadyl sulfate electrolyte is prepared. The preparation method of the modified vanadyl sulfate electrolyte is simple in technology and low in cost, and is widely applied to large-scale production of the vanadyl sulfate electrolyte for an all-vanadium battery.