The invention provides modified silk fiber with high moisture absorbability and moisture retentivity and a preparing method thereof. Fibrillated silk fiber is used as the raw material, chitosan low in molecular weight, sodium alga acid, corn starch and honeysuckle flower are used as a finishing agent high in moisture absorbability and moisture retentivity, and the raw material is impregnated in the finishing agent high in moisture absorbability and moisture retentivity and silk fibroin solution in sequence and then subjected to steaming processing and sizing, washing and drying to generate the modified silk fiber with high moisture absorbability and moisture retentivity. The modified silk fiber is high in fibrillation degree and excellent in moisture absorbability and moisture retentivity, the practicality of the silk fiber is improved through silk fibroin curing and finishing, and the intrinsic properties of silk are protected to the maximum extent.