The invention is applicable to the field of flame-retardant composite materials and provides a wood-plastic highly-dispersed reinforced flame-retardant composite material and a preparation method thereof. The process is simple; waste PE (Polyethylene) plastics and wood fibers are used as the recycled wood plastic material for processing, thus the cost is saved and the process is safe and environment-friendly; the compatibility of a flame retardant with the wood plastic material is improved by adding a wood fiber flame retardant and a synergistic flame retardant; a nano inorganic flame retardant and the wood plastic material are added to synergistically form a halogen-free flame-retardant system; combined with the advantages of uniform particle size distribution and no agglomeration of thenano-scale material, surface modification is performed on the nano inorganic flame retardant, not only the dispersion performance is increased in the PE but also the excellent flame-retardant effect can be obtained, thus the content of the flame retardant is reduced and the mechanical property of the wood plastic material system can be improved.