The invention relates to composite low-carbon free-cutting steel with excellent mechanical performance and a production method thereof. Through adjustment for the dosages and proportions of key elements, and control and optimization for a refining slagging process, continuous casting cooling conditions and a rolling temperature, efficient and stable production for the low-carbon free-cutting steelis realized, and effective control for sulfides is realized while the wear of silicon oxides with high hardness and aluminium oxides with high hardness on a tool; and through introduction for elementB, and control for N / B proportion, the adding time of the element B, and cooling separation for the element B, the positive effect of a BN-class graphite structure and the positive effect of the composite inclusion of the BN-class graphite structure for the oxides and sulfides are adequately exerted, the cutting machining performance of the low-carbon free-cutting steel is further improved, the dependence of the cutting performance on a sulfur content is reduced to a certain extent, and the anisotropy of the mechanical performance of materials is reduced, and through adding for elements Cu, Cr and the like, simultaneous consideration and balance for the low-carbon steel in the aspects of free-cutting performance and mechanical performance are effectively realized.