The invention relates to an environment-friendly insulating coating for cold-rolled non-oriented silicon steel and a preparation method thereof. The components of the insulating coating include: phosphate, molybdate, water, organic resin, silane coupling agent, and glycerol; the above-mentioned The weight ratio of each component is: phosphate 100, molybdate 3-20, water 800-1500, organic resin 20-50, silane coupling agent 0.5-5, glycerol 8-15. The steps of the coating preparation method are: (1) coating insulating paint on the surface of cold-rolled non-oriented silicon steel; (2) baking and drying, the baking temperature is 150-300 ° C; 600°C, the sintering time is 30-90 seconds; (4) Finished product. The insulating paint of the invention does not contain harmful elements, and the coating has good insulating performance, good adhesion and corrosion resistance, good punching and shearing processability and weldability, and can withstand heat resistance of stress-relieving annealing. The method of the invention is simple to operate, and the coating prepared by the method has good punching and shearing processability and weldability, and can withstand heat resistance of stress-relieving annealing.