The invention discloses highly heat-conducting insulation engineering plastic, which consists of the following components in part by weight: 100 parts of plastic substrate, 100 to 900 parts of heat-conducting filler, 1 to 45 parts of compatibilizer, 1 to 90 parts of toughening agent, 1 to 45 parts of reinforcing agent, 1 to 36 parts of lubricating agent and 0.3 to 5.4 parts of antioxidant. The invention also discloses a preparation method of the engineering plastic, which comprises the following steps of: drying the plastic substrate and the heat-conducting filler in a 60 to 100 DEG C air dry oven for 4 to 8 hours; putting the components into a high-speed mixer and mixing for 3 to 5 minutes; performing internal mixing on the mixture in an internal mixer for 10 to 30 minutes; and uniformly grinding the mixture in a grinder, transferring to a charging hopper of a double-screw extruder, feeding fiber fillers through a fiber inlet of the double-screw extruder, melting, mixing, extruding, cooling, drying, and pelletizing. The prepared material has high heat-conducting property and mechanical property, and is easily subjected to injection molding.