The invention provides a method for producing an air entrapping building block by utilizing red mud, comprising the following steps: mixing the following raw materials (dry basis) by weight part: 50-70 parts of red mud, 5-10 parts of calcium oxide and 20-40 parts of active gelled material; adding water according to 85-100 percent of the dry basis mass of the mixture, adding aluminium powder according to 0.04-0.06 percent of the dry basis mass of the mixture and adding an auxiliary agent according to 0.5-0.8 percent of the dry basis mass of the mixture; mixing to prepare a sizing agent; and finally obtaining the air entrapping building block through foaming, standing and steam curing. The air entrapping building block has the advantages of stable physical properties, light weight, good heat-insulation property, high waste use ratio, simple process, low cost, environmental protection, natural resource saving and the like, and can be used as non-load bearing partitions of urban high-risebuildings and as heat-insulation building blocks of low-temperature warehouses, heat-insulation warehouses and cold storage warehouses of industrial equipment.