The invention provides a reflective powder coating for traffic signs and a preparation method thereof. In the preparation process of the coating, a mixed filler is subjected to nano-modification and then added into a heating reaction kettle to interact with other components together, so that a more uniform molten-state mixture can be formed, and the fineness of the powder coating is promoted; a UVradiation or electron radiation apparatus is arranged to promote the mixture to have smaller particles and to promote the combination degree of the mixture; and further a monitoring apparatus is arranged and can monitor the real-time morphology of the mixture in the reactor in time, and thereby the stirring degree during the whole production process is more accurately controlled, the quality of production is ensured, not only the production process is simplified, but also the quality of production is ensured, and the production cost is reduced. The problems that agglomeration is easy to occur, and the process is difficult to accurately control in the production process of the powder coating are solved. The powder coating is used as a reflective material for traffic signs, and has the advantages of environmental protection, strong adhesion and weather resistance.