The invention discloses an isoprene rubber/butadiene styrene rubber composite transformer sealing gasket and a preparation method thereof. The preparation method comprises the following steps: step (1) soaking chitosan sequentially in acid liquor, a sodium alkyl benzene sulfonate solution and a sodium alkyl naphthalene sulfonate solution so as to obtain modified chitosan; step (2) carrying out primary vulcanization on isoprene rubber, butadiene styrene rubber, carbon black, sulfur and modified chitosan at the temperature of 145-175 DEG C to obtain a first mixture; and step (3) carrying out secondary vulcanization treatment on the first mixture, nano-rare earth oxide, polyester fibers and a vulcanizing agent to obtain the transformer sealing gasket at the temperature of 175-185 DEG C. The isoprene rubber/butadiene styrene rubber composite transformer sealing gasket has excellent mechanical property and ageing resistance. According to the preparation method, working procedures are simple, and raw materials are easily available.