The invention discloses water-soluble tea tree oil and a method for preparing the same. The water-soluble tea tree oil comprises from 5.00 to 50.00 parts of tea tree oil, from 1.40 to 6.50 parts of emulsifiers, from 0.05 to 0.20 part of antibacterial agents, from 0.01 to 0.05 part of antifoaming agents, from 0.01 to 0.15 part of essence and from 43.0 to 90.0 parts of water. The method includes (1), adding the emulsifiers, the antibacterial agents and the defoaming agents into the tea tree oil, heating the tea tree oil with the emulsifiers, the antibacterial agents and the defoaming agents until the temperature of the tea tree oil reaches an emulsification temperature, and uniformly stirring the tea tree oil to obtain a mixture; and (2), dissolving the essence in the water, heating the water with the essence so that the temperature of the water reaches an emulsification temperature, slowly adding the water with the essence into the mixture, and uniformly stirring the water and the mixture to obtain the water-soluble tea tree oil. The water-soluble tea tree oil and the method have the advantages that operation is simple, the production cost is low, and the prepared water-soluble tea tree oil is low in volatilization speed, high in efficacy, free of layering, skinning, oil slick and pollution and good in flowability and diffusion performance, is non-toxic, nonflammable, non-explosive, safe, stable and environment-friendly, and can be dissolved in water solution.