The invention discloses a preparation method of an Al2O3 particle-reinforced iron-based composite. The preparation method comprises the following steps: (1) an anhydrous aluminum chloride solution with the mole ratio being (5-9):1 and aluminum micro powder are mixed and heated at 200 DEG C for 2-3h, and after complete reaction, filtration is carried out and thus poly aluminum chloride is obtained; (2) poly aluminum chloride is dispersed in a 0.5mol/L alcohol solution, an aqueous solution of ammonia is slowly added and thus white precipitates are obtained, filtration, washing and drying are carried out, and thus a mixture of aluminum hydroxide and aluminum micro powder is obtained; and (3) the mixture of aluminum hydroxide and the aluminum micro powder is mixed with C powder and Fe powder, compression moulding is carried out, high-temperature sintering is carried out in an argon shielding furnace and thus the Al2O3 particle-reinforced iron-based composite is obtained. The problems that the density difference between an iron-based material and an Al2O3 particle material is big, and the interface is poor are solved. The prepared Al2O3 particle-reinforced iron-based composite has good mechanical properties, and can be widely applied to complicated-shape parts having requirements on high strength and high hardness.