The invention provides an oil-in-water drilling fluid with vegetable oil as an internal phase and a preparation method of the oil-in-water drilling fluid. The drilling fluid is prepared from the vegetable oil, water and a treating agent, wherein the volume ratio of the vegetable oil and water is 40:60 to 60:40; the treating agent comprises a main emulsifier, an auxiliary emulsifier, a filtrate loss reducer I, a thickening agent, NaOH, a thickening and shear strength improving agent, and a filtrate loss reducer II; based on 100 ml of vegetable oil and water, the content of the main emulsifier is 2-3.5 g, the content of the auxiliary emulsifier is 1-2.5 g, the content of the filtrate loss reducer I is 1-3.5 g, the content of the thickening agent is 1-1.5 g, the content of NaOH is 0.25-0.3 g, the content of the thickening and shear strength improving agent is 0.1-0.2 g, and the content of the filtrate loss reducer II is 1.5-4 g. The oil-in-water drilling fluid with the vegetable oil as the internal phase, provided by the invention, is stable in performance, high in drilling cutting resistance and clay pollution capacity, safe and environment-friendly, and can be directly discharged.