The invention discloses a halogen-free flame-retardant tung oil polyol and a preparation method thereof. The preparation method comprises: mixing tung oil, carboxylic acid, an acid catalyst, a hydroxylating reagent and 9,10-2H-9-oxa-10-phosphaphenanthrene-10-oxide (DOPO) according to a certain ratio, and heating to a temperature of 35-45 DEG C; adding a hydrogen peroxide solution in a dropwise manner under vigorous stirring, maintaining the reaction temperature at 40-65 DEG C by controlling the adding rate, and maintaining the reaction temperature for 3-5 h after completing the adding; and carrying out standing layering after completing the reaction, separating to obtain a water phase, neutralizing, carrying out water washing, and carrying out pressure reducing distillation to obtain the halogen-free flame-retardant tung oil polyol. According to the conjugated double bond of tung oil can improve the reactivity of the epoxy group, such that the hydroxylating reagent and the 9,10-2H-9-oxa-10-phosphaphenanthrene-10-oxide are added while the epoxidation is performed so as to effectively avoid the occurrence of the cross-linked side reaction and form the halogen-free flame-retardant tung oil polyol product; and the prepared halogen-free flame-retardant tung oil polyol has the hydroxyl value of 120-270 mgKOH/g, the phosphorus content of 1.0-5.0 wt%, the acid value of less than 1.0 mgKOH/g, the moisture content of less than 0.1 wt%, and the yield of higher than 92%, and is suitable for the preparation of halogen-free flame-retardant polyurethane materials.