The present invention discloses flaxseed peptides having effects of lowering cholesterol and a preparation method thereof. The preparation method includes the following steps: flaxseed selecting and impurity removing, primary low-temperature and weak-acid water washing, primary beating, primary pectin lyase enzymatic digesting and degumming, primary papain, neutral protease, beta-glucosidase, alpha-cyanohydrin protein and hydroxynitrile lyases protein hydrolysate and cyanogenic glycoside decomposition reacting, ultrasonic high-temperature enzyme inactivating and detoxifying, and then centrifuging, nano-filtering, spray-drying, and cholesterol-lowering flaxseed peptide obtaining. The preparation method solves the effects of the flaxseed gum on the flaxseed proteolysis and removes cyanogenic glycosides and hydrocyanic acids in the products of the flaxseed peptides. The flaxseed peptide products are prepared for the first time, can be applied in the food and health-care food industries, and have broad business outlooks.