The invention discloses thixotropic slurry and a preparation method thereof, and aims to solve the technical problem of preparing thixotropic slurry with good colloid property, thixotropic property and dispersing performance. The thixotropic slurry is prepared from the following raw materials in percentage by weight: 4-9% of sodium based bentonite, 0.2-0.4% of sodium carbonate, 0.05-0.15% of sodium carboxymethylcellulose CMC, 0.1-0.3% of polyacrylamide PHP, and the balance of water. The preparation method comprises the following steps of raw material selecting; mixing and stirring; cycle puffing. The thixotropic slurry disclosed by the invention is good in colloid property, thixotropic property and dispersing performance; all performance indexes can completely satisfy or exceed the performance requirements of pipe jacking construction; the thixotropic slurry is good in application effect, and wide in application scope; a preparation process is simple and easy to operate; the preparation cost is low, so that the construction cost can be further saved.