Disclosed are a sound absorbing fabric with improved thermal insulation, and a method of manufacturing the same, wherein an inorganic aerogel powder and a thermosetting binder resin are impregnated into a non-woven fabric made of a heat-resistant fiber, wherein the inorganic aerogel powder has a surface modified by a surfactant to be uniformly mixed with and dispersed in a binder resin, thereby forming the sufficient number of micro cavities inside the non-woven fabric and increasing dispersibility of the inorganic aerogel powder, and thus heat resistance, sound absorbing and sound insulating properties, and thermal insulation properties can be significantly improved.