The invention relates to a preparation method of a sludge compost containing seedling substrate, which takes sludge and river sand as the raw materials. The sludge is one or more of water supply sludge, industrial wastewater sludge and domestic sewage sludge. The container seedling substrate provided by the invention takes sewage sludge as the raw material, can make use of sewage sludge waste, solves the difficult sludge disposal problem, also can reduce the use of traditional substrate raw material peat, lowers the cost, and reasonably protects non-renewable resources. At the same time, the raw material cost is low, and the survival rate of citrus seedlings cultivated by the organic seedling substrate is up to 100%. The container seedling substrate provided by the invention can reduce the release rate of nutrients on the whole, reduce nutrient loss, and achieve the effects of slow release and long effect, i.e. only one time fertilization is needed, repeated after manuring is not needed in the seedling growth process, while the cost is lowered, operation is also reduced. Citrus seedlings cultivated by the substrate provided by the invention grow well, and have ordered emergence rate.