The invention provides a polyacrylic acid/acrylamide water-retaining agent containing nitrogen, phosphorus, kalium and montmorillonite, and a preparation method thereof. Part of neutralized acrylic acid and acrylamide are taken as main raw materials; urease and diammonium phosphate are added and the polymerization is carried out under the presence of a cross-linking agent and an initiator; when in polymerization, montmorillonite is added; and polymerization, cross linking, drying and crushing are carried out in water to obtain a complex water-retaining agent. Menwhile, a humic acid is used for conducting post processing to the product. The dried water-retaining agent prepared by the method has the capability of absorbing deionized water of 200 weight portions to 500 weight portions and the capacity of absorbing physiological salt solution of 20 weight portions to 50 portions. The method improves the salt tolerance of the water-retaining agent, types of fertilizers contained in the agent and the environment-friendly performance thereof, reduces cost, and is simple in technology and favorable to industrialized production.