The invention relates to flame-retardant polyester false-twisted fiber and a manufacturing method thereof. The content of phosphorus in a copolymerized phosphorus compound in the false-twisted fiber is 8000-12000 ppm, the DEG content is lower than 2.0 wt%, and the shrinking percentage after the false-twisted fiber is subjected to thermal treatment at 180 DEG C for 15 min is lower than 16%. The false-twisted fiber is prepared by subjecting copolymerized ester containing a phosphorus compound unit to melt spinning and false twisting. The relaxation rate during false twisting is 0.93-0.97. The false-twisted fiber has characteristics of good flame retardance, light resistance and friction resistance, and can be used as curtains, and other flame retardant materials.