The invention relates to a mushroom sauce and a preparation method thereof. The mushroom sauce comprises, by weight, 10-50% of vegetable oil, 5-25% of mushroom roots, 0-3% of dry chili powder, 1-3% of green onions, 2-5% of ginger, 2-4% of garlic, 2-10% of soybean paste, 2-10% of fermented soya beans, 2-10% of sweet bean sauce, 2-5% of white granulates sugar, 1-3% of aginomoto and 0.5-3% of spice. The mushroom sauce and the preparation method have the advantages that a recipe is scientific and reasonable, a preparation technology is overall simple and high in implementability, nutrient substances contained in the mushroom roots can be kept greatly, seasoning ingredients are enabled to deeply reach to the interior of diced mushrooms, people's requirements on healthy, nutrient, tasty and convenient food are met, the nutrient substances such as protein, amino acid, microelements and the like contained in the mushroom roots can be locked, the prepared mushroom sauce is healthy, unique in flavor, good in taste, beneficial to consumption, rich in nutriments and beneficial to body health, and the problems that an existing mushroom sauce is bad is taste, poor in nutritional ingredients, complex in production technology and high in cost are solved.