The invention relates to iron powder with high silicon content and a preparation method thereof. The iron powder with high silicon content comprises the following components by mass percentage: 0.003-0.1% of C, 5.0-30% of Si, 0.05-0.3% of Mn, less than or equal to 0.012% of P, less than or equal to 0.012% of S, 0.01-0.10% of Als, less than or equal to 0.01% of N, 0.10-0.30% of other alloy elements, and the balance Fe, wherein the sum of the mass percentages of the components is 100%. According to the iron powder and the preparation method thereof, the high-silicon iron powder with low impuritycontent and uniform powder particle size is prepared through the processes of molten steel smelting, gas atomization, dehydration, filtration, drying, reduction, crushing treatment and the like.