A luminescent material of gallium indium oxide and preparation method thereof are provided. The luminescent material of gallium indium oxide has a chemical formula of GaInO3:zM, wherein, M is the metal nano-particle which is selected from one or two of Ag, Au, Pt and Pd, and z meets the condition of 1×10−5≦z≦0.02. The method for preparing the luminescent material comprises the following steps: (1) preparing the mixed solution containing indium ion and gallium ion; (2) adding chelator and crosslinking agent into the mixed solution to obtain a chelate solution; (3) adding M nano-particles sol which is surface treated into the chelate solution, heating by water-bath and stirring, drying to obtain the precursor of the luminescent material; (4) preheating the precursor, cooling, grinding, calcining, then cooling and grinding again to obtain the luminescent material.