The invention discloses a tung oil based polyhydric alcohol and a preparation method thereof. The method comprises the following steps: mixing tung oil, a reaction control phase transfer catalyst, a hydroxylation agent and a hydrogen peroxide solution at a ratio; increasing the temperature to 65-75 DEG C; reacting for 2-4 hours under a violent stirring condition; and after ending the reaction, filtering and separating the reaction control phase transfer catalyst; neutralizing, washing with water and performing reduced pressure distillation, thereby acquiring the tung oil based polyhydric alcohol. According to the invention, the conjugated double bond of the tung oil is utilized to promote the characteristic of reaction activity of epoxy groups; oil-soluble fatty acid is added in an epoxidation process; the reaction system becomes a reaction control phase transfer catalyst system; the cross-linking side reaction can be effectively avoided; the tung oil based polyhydric alcohol product can be effectively compounded; the prepared tung oil based polyhydric alcohol product is characterized by hydroxyl value of 120-270mgKOH/g, acid value below 1.0mgKOH/g, moisture content below 0.1wt% and yield above 92% and can be used for preparing a polyurethane material.