The invention discloses a novel soft shape-maintenance knitted denim fabric production process, which comprises the following steps: selecting fabric, performing pretreatment, dyeing, performing aftertreatment, performing final finishing sizing and washing with water. According to the invention, the advantage of good color fastness of reactive-based indigo dye is strengthened, and the prepared fabric feels similar to reactive dye. Meanwhile, the advantages of being comfortable and elastic and maintaining the shape of knitted fabrics are combined. The production process disclosed by the invention enables the color fastness of the knitted denim fabric to meet the requirements of the latest national standard GB31701-2015 Technical Code for Safety of Infants and Children Textile Products.