The invention provides a colored antibacterial Lyocell fiber. The fiber is composed of a Lyocell fiber matrix and a silk fibroin/iridoid compound. The invention further provides a preparation method of the fiber. The functional Lyocell fiber can be produced on the basis of a conventional Lyocell fiber production line, the method is simple and suitable for large scale production; the iridoid compound reacts with protein, then color development can be conducted, and the antibacterial property is achieved. Therefore, the prepared Lyocell fiber has the colored and antibacterial functions, dyeing is uniform, no additives are added, the fiber strength effect is small, and a Lyocell fiber solvent recovery system is not affected; the bacteriostasis rate of the prepared fiber to staphylococcus aureus, escherichia coli and candida albicans is larger than or equal to 80%, and after washing is conducted for 50 times, the antibacterial rate is larger than or equal to 70%.