The invention discloses a magnetic sensor with huge magnetoresistance and a preparation method thereof. The sensor comprises a substrate (1), an insulating layer (2) on the substrate, a ferromagnetic layer (4) wrapped with a conductive layer (5). In particularly, a loop (3) is coated on the ferromagnetic layer (4) wrapped with the conductive layer (5), and the loop (3) and the ferromagnetic layer (4) are both covered by the insulating layer (2). The method is realized by respectively repeated adoption of technologies, including mask, lithography or ion etching, DC magnetic control sputtering, magnetic control sputtering of radio frequency or improving chemical vapor deposition with plasmas, and processing technology of a semiconductor membrane in sequence to carve, sputter and generate a lower lead layer of the loop, a lower insulating layer, the magnetoresistance sensor comprising the ferromagnetic layer, the conductive layer and another ferromagnetic layer, a medium insulating layer, a vertical lead of the loop, an upper lead layer of the loop, and an upper insulating layer on the substrate. Afterwards, the lower lead layer, the vertical lead and the upper lead layer of the loop are electrically connected, thus obtaining the magnetic sensor with huge magnetoresistance. The invention has high precision and sensitivity and is beneficial for industrial production.