The invention provides a catalytic cracking catalyst and a preparation method thereof, the catalyst is prepared from 15-60 wt% of molecular sieve, 15-60 wt% of clay, 10-30 wt% of pseudoboehmite, 5-20wt% of adhesive, 0.1-5 wt% of phosphorus-containing compound (calculated by P), 0.1-3 wt% of magnesium-containing compound (calculated by Mg), and may also contain 0-5 wt% of rare earth oxide. The preparation method comprises the following steps: (1) catalyst forming: mixing and pulping molecular sieve, clay, pseudoboehmite, phosphorus-containing compound and adhesive; then adding magnesium-containing compound to mix and pulp, heating and stirring, spraying and forming, and roasting to obtain the formed catalyst; (2) catalyst modification: mixing and pulping the formed catalyst, ammonium salt,phosphorus-containing compound and water, adjusting pH, heating and reacting, and filtering and drying to obtain the catalytic cracking catalyst of the invention. The catalytic cracking catalyst provided by the invention has the characteristics of low coke yield and high total liquid collection (liquefied gas, gasoline and diesel).