The invention relates to the field of chemistry and in particular relates to a method for preparing hydroxy fatty acids by utilizing swill-cooked dirty oil. The method comprises the following steps: pretreating the swill-cooked dirty oil to obtain refined swill-cooked dirty oil; putting the obtained refined swill-cooked dirty oil into a reaction kettle, and performing saponification to obtain sodium aliphatate, adding concentrated hydrochloric acid into the sodium aliphatate to prepare swill-cooked dirty oil fatty acids; adding a mixed solution prepared by mixing formic acid and a hydrogen peroxide solution into the swill-cooked dirty oil fatty acids, and reacting to obtain swill-cooked dirty oil epoxidized fatty acids; and hydrolyzing the swill-cooked dirty oil epoxidized fatty acids, and reacting to obtain the crude hydroxy fatty acids. The high-quality hydroxy fatty acids are obtained through preparation, and a technical route is provided for preparing the swill-cooked dirty oil into an intermediate with high additional value, so that the swill-cooked dirty oil is subjected to reasonable secondary utilization. Moreover, the process is simple, the product is stable, the hydroxyl value is in a range from 243 to 271 mg/KOH/g, the iodine value is less than 2.75mgI2/100g, and the conversion rate is 89-93 percent.