The invention provides a stainless steel fiber and a preparation method thereof. The preparation method comprises the following steps that (1) a required amount of metallic aluminum or aluminum alloy and copper or copper alloy is encased into a flat material box made of a 304 stainless steel sheet or packaged with a 304 stainless steel soft and thin sheet into a flat shape, and one of the flat upper surface or the flat lower surface of the material box or a packaging body is provided with one or more openings; (2) a 304 stainless steel raw material is added into a smelting furnace and is heated and smelted into molten steel; the material box or the packaging body loaded with metallic aluminum and copper is added into the molten steel with the openings downwards; (3) the stirring and temperature conditions of the molten steel are adjusted to enable the metal or the metal alloy and the material box or the packaging body to be gradually molten into the molten steel; and (4) the molten steel continues to be subjected to stirring, standing and temperature adjustment, and steel fibers are prepared through a melt extraction machine. Stainless steel fibers manufactured through the method has small discreteness in color and mechanical strength, and the heat resistance and oxidation resistance of the stainless steel fibers are substantially improved.