The invention discloses a paper mosquito coil and a preparation method thereof. The paper mosquito coil comprises a paper fragrant blank containing a mosquito repelling agent and a mosquito eradication agent, and comprises the following components in percentage by weight: 60 to 90 percent of waste paper, 0 to 25 percent of wood fiber, 8 to 33 percent of carbon powder and 2 to 7 percent of light calcium carbonate. The paper mosquito coil has the advantages of low cost, light weight, no pollution to hands and difficulty in fracture, is easy to ignite and cannot flame out. The preparation method comprises the following steps of: 1, crushing waste paper raw materials to form coarse pulp; 2, adding the wood fiber, the carbon powder and the light calcium carbonate into the coarse pulp, and uniformly mixing; 3, grinding the mixture by using a grinding disc to form waste paper pulp; 4, diluting the waste paper pulp by adding water, removing impurities, and manufacturing a mosquito coil paper board with the pulp; 5, punching the mosquito coil paper board, and drying to obtain a mosquito coil white blank; and 6, spraying the agents onto the white blank to obtain the paper mosquito coil. The method has the advantages of energy conservation, environment friendliness, high labor productivity and capability of production on a large scale.