The invention belongs to the technical field of construction materials, and specifically relates to a cement base thermal insulation mortar containing rice straw fibers and an application method thereof. The cement base thermal insulation mortar is composed of common silicate cement, calcium hydroxide, high calcium fly ash, rice hull ash, rice straw fiber, polyacrylonitrile fiber, vitrified beads, rice hull, EVA emulsion powder, cellulose ether, an air-entrainer, and starch ether. The problems of common vitrified bead thermal insulation mortar such as high cost, easy shrinkage and cracking, and the like are solved. At the same time, agricultural wastes such as wheat straw and other solid wastes are fully utilized, the production cost is low, the construction is simple and quick, moreover, the provided cement base thermal insulation mortar has the advantages of good workability and mechanical properties, small shrinkage, no cracking, excellent thermal insulation performance and fireproof property, safety, durability, and flameproof property, and the fireproof property can reach the A grade. Good economic benefits and social benefits can be generated, and the mortar is suitable for thermal insulation and energy saving engineering of inner/outer walls.