The invention discloses modified coumarone petroleum resin and a preparation method thereof. The preparation method comprises the steps of firstly adding a raw material HW-263-008-04 into a pretreatment device, enabling the raw material to become flowing fluid; entering into a gauge tank for metering, pumping into a reaction still for polymerization reaction; adding an initiator A for free radical polymerization when the polymerization reaction is performed, adding auxiliaries B and C for cross-linked polymerization, adding a polymerization inhibitor D to terminate polymerization; performing distillation when the polymerization is finished, distilling out the unpolymerized components; emptying, smashing, and packaging the distilled product, then a finished product of the modified coumarone petroleum resin is obtained. According to the modified coumarone petroleum resin and the preparation method thereof, the distillation generated in a production process of imidacloprid and induction residue HW-263-008-04 are utilized to produce the modified coumarone petroleum resin, the modified coumarone petroleum resin and the preparation method can change waste into valuable, improve environment, reduce pollution, and bring benefit to society and people.