The invention provides a production method of electrical grade magnesium oxide powder. Particularly the method comprises the following steps of crushing fused magnesia blocks, performing screening and alkali treatment; drying; adding an inorganic filler which is composed of ophiolite and kaolin, and mixing to uniform; performing screening and demagnetization; and spraying silicone oil on the surface of magnesium oxide powder in a spraying manner for obtaining the electrical grade magnesium oxide powder. The electrical grade magnesium oxide powder prepared according to the production method has advantages of improving electric insulating performance, greatly reducing leakage current, greatly increasing thermal-state withstand voltage, realizing no peak value in energization, realizing no blackening or carbonization of the magnesium oxide powder, and greatly improving product quality of an electric heating tube.