The invention relates to the technical field of high polymer materials and discloses a cloth regeneration nylon toughening agent. The cloth regeneration nylon toughening agent is prepared from a polyolefin elastomer, a first grafting monomer, a second grafting monomer, an end-capping aid, an initiator, an antioxidant, a diluent, a liquid aid and the like. The invention further discloses a preparation method of the cloth regeneration nylon toughening agent. The preparation method comprises the steps of mixing the raw materials, adding the raw materials into an extruder, and carrying out fusion plasticization, reaction, end capping, extrusion, granulation, cooling, dewatering and drying. According the preparation method, a polyolefin elastomer graft is produced by virtue of a twin-screw extrusion method, the aid is utilized for capping the end of polar maleic anhydride groups in the later period of grafting reaction, and then the polar maleic anhydride groups can be used for toughening cloth regeneration nylon; and by utilizing a later-period end capping technique, the reaction between active maleic anhydride and an organic small molecule aid in the cloth regeneration nylon can be eliminated, so that the degradation of the cloth regeneration nylon during the toughening and modification is avoided, and the toughness of the modified cloth regeneration nylon is improved.