The present invention provides a water cooled mold for casting aluminum alloy wheels and a manufacturing method thereof. The water cooled mold is provided with first-type water cooling channels with high heat exchange efficiency and second-type water cooling channels with low heat exchange efficiency. The first-type water cooling channels are concave grooves through which cooling water flows, and a cooling surface of the mold is in contact with open surfaces of the concave grooves. The second-type water cooling channels are grooves with stainless steel pipes, and the stainless steel pipes are in contact with the cooling surface of the mold. The second-type water cooling channels are installed on mold portions corresponding to wheel window positions of a cavity, and the first-type water cooling channels are installed on mold portions corresponding to spokes, flanges and rims of the cavity. The water cooled mold of the present invention is capable of accurately controlling a direction and a range of cooling within a three-dimensional space; the use of a thermal insulating groove is omitted so that the mold can be manufactured more simply and the service life of the mold can be prolonged; the cooling efficiency is high and resources are saved; and the whole device is simple to manufacture and low in cost.