The invention discloses a biodegradable lubricating oil, and a preparation method thereof. The preparation method comprises following steps: 1, raw materials are prepared, wherein the raw materials comprise cotton seed oil, bis(2-ethylhexyl) sebacate, a dispersant, an extreme pressure antiwear agent, an antioxidant, potassium sorbate, dodecenyl succinic acid, a viscosity index improver, an a defoaming agent; 2, an obtained cotton seed oil mixture is introduced into a blending vessel for stirring, and is discharged through a 2-10<mu>m filter so as to obtain a finished product. The biodegradablelubricating oil is scientific and reasonable in formula, is friendly to the environment, is nontoxic, is prepared taking cotton seed oil as a base oil, is cheap, and is biodegradable; cotton seed oilis subjected to functional treatment, so that the lubricating performance and anti-wearing performance of the lubricating oil are improved greatly; the preparation method is simple and convenient, and is convenient for industrialized production. The biodegradable lubricating oil is excellent in wear resistance, lubricating performance, low temperature performance, high temperature performance, and heat oxidation stability, and the bio-degradability and the economical performance are better than those of fully synthetic oil.