The invention provides sheath type magnesium oxide for a fire-proof cable, and a preparation method thereof. The preparation method of the sheath type magnesium oxide for the fire-proof cable comprises the following steps of: preparing organic silicone oil and methylbenzene into solution according to a proportion, and mixing electrically smelted magnesium oxide obtained by crushing, magnetic separation and roasting with calcined kaolin according to a proportion; mixing the mixture with solution; after drying the mixture in a rotary furnace, mixing the mixture with aluminium dihydrogen phosphate powder according to a proportion; putting a magnesium oxide wet material obtained by mixing the mixture with water into a grinding tool to press and form; and drying, solidifying and cooling the formed magnesium oxide in an oven so as to obtain the sheath type magnesium oxide for the fire-proof cable. The sheath type magnesium oxide for the fire-proof cable disclosed by the invention is low in cost, high in insulating property, good in humidity resistance and high in strength and high-temperature resistance.