The invention relates to a propagation and breeding method of red-and-white lion-head swallowtail grass goldfish. The method includes the first step of parent fish selection, the second step of artificial propagation and artificial insemination, the third step of artificial incubation, the fourth step of earlier-stage culture, the fifth step of first-level optimization and later-stage culture, and the sixth step of second-level optimization and later-stage intensive culture. The red-and-white lion-head swallowtail grass goldfish bred through the propagation and breeding method of the red-and-white lion-head swallowtail grass goldfish are good in individual strain, bright in color, symmetrical and attractive in body form and obvious in varietal character and have plump meat.