The invention discloses a waterproof and anti-crack outer wall putty powder and a preparation method thereof. The outer wall putty powder is prepared from, by weight, 60-80 parts of talcum powder, 10-20 parts of attapulgite clay, 10-18 parts of ground calcium carbonate, 2-8 parts of sodium bentonite, 5-10 parts of calcium oxide, 5-10 parts of anhydrous calcium sulfate, 1-5 parts of polyacrylamide, 0.6-3 parts of carboxymethylcellulose sodium, 2-5 parts of pulverized fuel ash, 0.2-0.5 part of pure iron powder and 0.4-0.8 part of a water repellent. The preparation method comprises the steps of attapulgite clay acidification, vibrating screen grinding, co-heat superfine crushing and the like. The putty powder is firm in structure and smooth and delicate in appearance and has good adhesive force with wall, watertightness, corrosion resistance and cracking resistance are achieved, the preparation method is simple and easy to implement, construction is easy and convenient, and blade coating and leveling performances are excellent.