The invention belongs to the technical field of coating compositions, in particular to an ultra-thin silicon steel surface insulating coating and a preparation method thereof. The insulating coating provided by the invention is prepared from the following components: 65 to 85 parts of magnesium dihydrogen phosphate, 0.1 to 1.5 parts of insulating inorganic nanoparticles, 2 to 15 parts of silica sol, 2 to 4 parts of boric acid and 1 to 32.9 parts of deionized water. The coating formed by synergistic effects of all the components has excellent adhesion property to the surface of a bare steel sheet of ultra-thin silicon steel, and meanwhile, the insulation performance is ensured. The insulating coating provided by the invention is also prepared from 0.01 to 5 parts by weight of organic resin;by the addition of the organic resin, the adhesion of the ultra-thin silicon steel surface coating can be improved and subsequent high temperature sintering can be resisted, so that the ultra-thin silicon steel with the coating can be suitable for preparing a roll core of a saturation reactor, and further complex operating conditions such as strong vibration and high temperature rise of high pressure anode saturation reactors are met.