The invention discloses an orange peel jelly and a preparation method thereof. The orange peel jelly includes the following raw materials in parts by weight: 30-50 parts of fresh orange peels, 20-30 parts of xylitol, 10-20 parts of honey, 10-25 parts of thickeners, 5-10 parts of sour agents and 3-5 parts of potassium sorbate, and the orange peel jelly is prepared by orange peel pretreating, thickener dissolving and blending, sterilizing and cooling. The orange peel jelly is natural in orange fragrance, free of bitter or astringent taste, rich in juice, good in edible sensory experience and huge in market potential, and the preparation method is simple in process, low in wastage, short in preparation time, fast in progress, capable of turning waste into treasures and conducive to industriallarge-scale production.