The invention provides a fast recovery diode and a manufacturing method thereof. The manufacturing method includes: injecting P-type ions into the back of a silicon substrate to form a P-type doped area, and forming an epitaxial layer on the back; forming an active area and a terminal area on the front of the silicon substrate; doping N-type ions at the edge of the terminal area to form a cut-off ring, and doping N-type ions in the epitaxial layer to form an N+ cathode area; respectively depositing a metal layer on each of the front and the back of the silicon substrate to form metal electrodes; forming an N-type buffering layer on the back of the silicon substrate. Compared with the prior art, the fast recovery diode and the manufacturing method have the advantages that position relation between a P island and the buffering layer and area proportion of each P-type doped area can be set according to performance needs of the fast recovery diode, and the fast recovery diode is enabled to have high reverse recovery softness and high reliability.