The invention relates to a copper bismuth catalyst for combining chemically into 1, 4-butynediol with formaldehyde and ethyne and a preparation method thereof. The preparation method comprises the following steps of: preparing mixed solution which contains copper salt, bismuth salt, magnesium salt and dispersant; dropping alcoholic solution with an organic silicon source into the mixed solution; adjusting a pH value of the mixed solution with alkaline solution to obtain mixed precipitate; and further aging, washing, drying and baking in inert atmosphere to obtain the copper bismuth catalyst with C-MgO-SiO2 a carrier, in the catalyst, the content of CuO accounts for 25-50 weight percent, and the content of Bi2O3 accounts for 2-6 weight percent. The catalyst is applied in a reaction of combining chemically into 1, 4-butynediol with formaldehyde and ethyne, and has high catalytic activity and high selectivity.