The invention discloses waterborne epoxy modified acrylic acid insulation varnish as well as a preparation method and an application thereof. The preparation method of the waterborne epoxy modified acrylic acid insulation varnish comprises steps as follows: epoxy resin and a solvent are added to a reaction kettle, the mixture is heated to 60-80 DEG C under the protection of nitrogen, stirred until epoxy resin is dissolved and heated to 90-135 DEG C, 20% of a mixture of acrylic acid monomers, acrylic ester monomers, hydroxyl acrylic monomers and an initiator is dropwise added, 80% of the mixture of the monomers and the initiator is dropwise added after 0.5-1 h, the components are completely dropwise added within 3-5 h, a proper quantity of imitators and solvents are supplemented, the mixture is kept at the temperature of 90-135 DEG C for 1.5-2 h, mixed with a neutralizer to be neutralized for 0.5-1 h, then cooled to 60-70 DEG C, mixed with a crosslinking age, pigment filler, an aid and deionized water and stirred at a high speed for 2-3 h, and the epoxy resin modified waterborne acrylic acid insulation varnish is obtained. The waterborne insulation varnish has excellent adhesion, water resistance, corrosion resistance and insulativity.