The invention provides a preparation method of a tracing type scale inhibition and dispersion agent for circulating water. The preparation method comprises the steps that a dendritic macromolecular polyamide-amine solution with the fluorescent characteristic is dropwise added into a scale inhibition and dispersion type polymer solution, the reaction temperature is controlled to be 20-70 DEG C andkept for 3-5 hours, and the brown-yellow tracing type scale inhibition and dispersion agent is obtained, wherein a scale inhibition and dispersion type polymer is one or more of an acrylic acid polymer, a maleic acid polymer, a sulfoacid polymer and a carboxylic acid polymer; a dendritic macromolecular polyamide-amine compound with the fluorescent characteristic is 1.0 G, 2.0 G, 3.0 G and 4.0 G products with one ore more of ethylenediamine, ammonia, diethylenetriamine and triethylene tetramine as nuclei. Compared with the prior art, the tracing type scale inhibition and dispersion agent developed through the method is novel in structure, free of toxins and harm and good in scale inhibition and dispersion performance; meanwhile, online measurement and real-time control of water treatment agents can be achieved by measuring the intensity of fluorescent groups.