The invention relates to composite ceramsite prepared from water purification sludge and diatomite and a preparation method of the composite ceramsite and belongs to the field of inorganic nonmetallic materials. The composite ceramsite is prepared from raw materials in parts by weight as follows: 60-90 parts of water purification sludge, 20-30 parts of diatomite and 10-20 parts of calcium oxide. The preparation method of the composite ceramsite comprises preparation steps of mixing, pelletizing, drying, preheating and roasting. The water purification sludge produced in the production process of a water supply plant and waste diatomite used for auxiliary filtration in a brewery are used as raw materials, the dispose problem of the two wastes can be effectively solved, and wastes are treated by wastes by recycling.