The invention relates to cotton/stainless steel composite yarn and a production method thereof. The composite yarn comprises short cotton fibers and a single stainless steel filament or a stainless steel filament tow and is characterized in that the short cotton fibers tightly wrap the single stainless steel filament to obtain composite core-spun yarn or the stainless steel filament tow tightly wraps the short cotton fibers to obtain Sirofil composite wrapped yarn, the short cotton fibers in the composite core-spun yarn comprise double strands, and the short cotton fibers in the Sirofil composite wrapped yarn comprise one strand. During production, the feeding position of the stainless steel filament is kept the same on the same device, the production of cotton/stainless steel composite core-spun yarn or cotton/stainless steel Sirofil composite wrapped yarn is achieved by using single-cotton-roving feeding or double-cotton-roving feeding, and accordingly one machine dual purpose is achieved, utilization efficiency is increased, and product variety is increased.