The invention discloses an integrated composite wall decorative building block and a construction method thereof. The decorative building block comprises a finish coat and a brick body, the finish coat and the brick body are formed by integrally mixing foaming cement and ceramic particles, the finish coat is integrally formed on the front face of the brick body through foaming, a longitudinal splicing groove is formed in one of the left side and the right side of the brick body, a longitudinal splicing protruding strip is formed in the other of the left side and the right side of the brick body and corresponds to the longitudinal splicing groove, a horizontal splicing groove is formed in the bottom face of the brick body, a horizontal splicing protruding strip is formed on the top face ofthe brick body and corresponds to the horizontal splicing groove, and a cross groove is formed in the back face of the brick body; the finish coat and the brick body of the decorative building block are formed integrally, and have the advantages that the finish coat never falls off, aging and corroding are resistant, anti-permeability is high, the weight is small, and the properties of heat preservation and sound insulation are good; according to the construction method, high efficiency and rapidness are realized, and construction and labor costs are low.