The invention discloses environmentally-friendly flame-retardant wallpaper and a preparation method thereof. The preparation method comprises the following steps: (1) smashing, mixing and cooking wooddust, bamboo leaf, tree skin, straws, folium artemisiae argyi, mint, convallaria, flame retarding filler and lime water according to a weight ratio of 100:(15-55):(20-30):(10-15):(3-10):(2-6):(5-10):(21-30):(150-300) to prepare slurry; performing washing, bleaching, knocking, paper removal, squeezing till paper contains no water and paper baking on the slurry to prepare a wallpaper base layer material; (2) conveying the wallpaper base layer material into a first coating machine, coating the surface of the wallpaper base material with a carbon fiber material through an adhesive, drying the surface with hot air, and cooling the material to obtain a wallpaper semifinished product; (3) performing pattern printing, hot air drying, waterproof layer printing and hot air drying on the wallpaper semifinished product in sequence to prepare the environmentally-friendly flame-retardant wallpaper. The environmentally-friendly flame-retardant wallpaper is excellent in flame retardancy and high temperature resistance and is healthy and environmentally friendly.