The invention discloses an amorphous diffusion alloy and a preparation method thereof. The amorphous diffusion alloy is prepared from nickel coated titanium carbide, boron carbide, mixed rare earth, ferrotitanium powder, superfine high-carbon chromium iron powder, silicon carbide whiskers, boron nitride, lanthanum oxide, cerium oxide, zirconium oxide, copper powder, high-nitrogen ferrochrome, cobalt powder, manganese powder, tungsten powder, nanometer titanium oxide, and the balance of superfine iron powder, wherein the mixed rare earth is heavy rare earth or light rare earth. The amorphous diffusion alloy is mainly used in iron-based powder metallurgy products, can improve the impact, tensile fatigue, wear and heat resistance of the products, can partially or completely substitute noble metal elements, and reduces the cost of the products.