The invention discloses a powder coating containing modified sepiolite powder and a preparing method thereof. The powder coating containing the modified sepiolite powder is composed of raw materials comprising modified epoxy resin, bisphenol S epoxy resin, linear low density polyethylene resin, modified sepiolite powder, polyethylene wax, film forming resin, polydimethylsiloxane, benzoin, silver powder, acrylic resin, superfine talcum powder, hexamine, 2,6-di-tert-butyl-4- dimethylamino methyl) phenol, n-butyl methacrylate and polyacrylamide. The powder coating is a green and environment-friendly coating, nontoxic and heat-resistant, contains no solvent, and discharges no volatile organic compound (VOC), and furthermore the modified sepiolite added in the powder coating enhances compatibility of the modified epoxy resin, the bisphenol S epoxy resin and the linear low density polyethylene resin, improves surface leveling of the powder coating, has high gloss retention, and enhances decorating performance of the powder coating, and therefore, an obtained finished product is high in pass percent, and industrialization mass production can be achieved.