The invention provides a groove type field effect transistor structure and a preparation method thereof. The preparation method comprises the steps: providing a substrate, forming an epitaxial layer, forming a device groove in the epitaxial layer, and forming a shielding dielectric layer, a shielding gate layer, a first isolation dielectric layer, a gate dielectric layer, a gate layer, a second isolation dielectric layer, a body region, a source electrode, a source electrode contact hole, a source electrode structure and a drain electrode structure. In the preparation process of the groove type field effect transistor structure, a self-alignment process is adopted, so that the pitch of a cell unit is not limited by the exposure capability of a photoetching machine and the alignment precision of the photoetching machine, the pitch of the cell unit of a device can be further reduced, the cell density is improved, the channel resistance of the device is reduced, and a device structure with stable electrical parameters and low characteristic on-resistance is obtained; by arranging a T-shaped source electrode structure, the contact area between a source electrode structure and a source and the contact area between the source electrode structure and the body region are increased, so that the contact resistance of the source can be effectively reduced, and the avalanche tolerance of the device is improved.