The invention provides a regenerated fiber blended knitted fabric and a preparation method thereof. Blended yarn includes, by mass, 35% of regenerated cotton fiber and 65% of regenerated polyester fiber, the transverse density of the knitted fabric is 71 / 10 cm, and the longitudinal density of the knitted fabric is 39 / 10 cm. Therefore, the regenerated fiber blended knitted fabric has the advantagesof cotton and terylene, is full and soft in hand feeling, good in air permeability, excellent in elasticity and wear resistance under dry and wet conditions, good in stiffness and shape retention property and not easy to wrinkle and can be rapidly dried and free of ironing after washing, waste turns into treasure, the production cost is reduced, and the short supply of natural fibers is made up for. Besides, the regenerated fiber blended knitted fabric prepared by the preparation method is detected according to the relevant standards, the detection result shows that the developed product is free of formaldehyde and has good environmental protection characteristics; the color fastness to washing and the fastness to rubbing of the fabric are higher than the standards, the production processof the product is feasible, and the product quality and functions can reach the advanced level in China.