The invention relates to preparation for a pinus koraiensis phytoncide finishing agent, a fabric finished by same and a finishing method thereof. The formula of the finishing agent contains 10-40g/L of pinus koraiensis phytoncide microcapsule, 10-35g/L of chitosan cross-linking agent, 2-5g/L of organic silicon soft finishing agent and 1-3g/L of penetrant. The pinus koraiensis phytoncide finishing agent is prepared according to the steps of extracting pinus koraiensis phytoncide, preparing the pinus koraiensis phytoncide microcapsule, preparing the pinus koraiensis phytoncide finishing agent, bottling and packaging. The finishing agent is applied to the finishing of the cotton fabric. The cotton fabric has the antibacterial rate for staphylococcus aureus of above 98.2%, antibacterial rate for escherichia coli of above 92.3%, antibacterial rate for candida albicans of above 90.5%, deodorization rate of above 97.2%, mite-proof rate of above 90.6% and the reducing rate of sterilizing, deodorizing and mite-proof effects of below 10% after being cleaned for more than 20 times.