The invention relates to a low-density high-strength high-modulus polyacrylonitrile-based carbon fiber and a preparation method thereof. Polyacrylonitrile (PAN) yarns are subjected to online dipping treatment by nitrogen-containing compound solution after being subjected to routine pre-oxidization and low-temperature carbonization, and then directly enter a graphitization furnace to be subjected to high-temperature treatment. The prepared carbon fiber has low density, high tensile strength and high tensile modulus, facilitates reduction in the weight of the reinforcement when used for preparing a composite material, and is favor for manufacturing light-weight structures.