The invention relates to an environment-friendly halogen-free flame-retardant copolyoxymethylene compound and a preparation method thereof, belonging to the field of the preparation of flame-retardant polymer material. The compound comprises the components with the mass percentage as follows: 56.0-69.0 percent of copolyoxymethylene resin, 15.0-22.0 percent of flame retardant, 5.0-7.0 percent of flame retardant synergist, 3.0-7.0 percent of char-forming agent, 3.0-5.0 percent of toughener, 0.1-0.5 percent of formaldehyde absorbent, 0.1-1.0 percent of antioxidant and 0.5-3.0 percent of heat rejection and dripping-resistant agent. In the invention, the flame retardant, the flame retardant synergist and the heat rejection and dripping-resistant agent are coated by the toughener to manufacturecompound flame retardant; then the compound flame retardant is mixed with the copolyoxymethylene, the formaldehyde absorbent, the char-forming agent and the antioxidant uniformly and the mixture is extruded from a double-screw extruder and granulated; and the copolyoxymethylene compound is obtained. The compound has good flame-retardant performance, the flame-retardant grade reaches UL94V-0 grade, and the compound is friendly to the environment.