The invention discloses water-soluble acrylic alkyd resin and a preparation method thereof. The water-soluble acrylic alkyd resin is prepared from the following raw materials in percentage by weight: 40-50% of flaxseed oil, 15-20% of trimethylolpropane, 3-6% of pentaerythritol, 2-5% of phthalic acid, 3-6% of m-phthalic acid, 8-12% of trimellitic anhydride, 30-40% of butyl acrylate, 4-8% of glycidol methacrylate, 3-6% of acrylic acid, 20-25% of hydroxyethyl methacrylate, 10-15% of styrene, 20-30% of butyl glycol ether, 5-10% of xylene and 2-4% of composite initiator. The water-soluble acrylic alkyd resin disclosed by the invention has the advantages of excellent durability, weatherability, wettability, solvent resistance, corrosion resistance, flexibility, gloss and color retention, quick drying, high hardness, storage stability and the like, and the use performance is improved on the basis that the defects of poor storage stability, poor wettability and the like of the ordinary alkyd resin are overcome, so that the application field of the water-soluble acrylic alkyd resin is enlarged.