The invention discloses iron-based amorphous powder and a preparation method and application thereof. The powder comprises the following elements in percentages by weight: 17-23wt% of Cr, 2.7-4.5wt% of B, 0.3-1wt% of C, 0.5-2.5wt% of Si, 2-3wt% of Cu, 3-8wt% of Ni, 12-18wt% of Mo, 2-4wt% of Co and the balance of Fe. The preparation method comprises the following steps: adding raw materials in an induction electromagnetic furnace, heating and melting; and carrying out water atomization on molten metal, then drying, and screening powder. According to the application of the iron-based amorphous powder in preparation of an anti-cavitation and corrosion-resistant iron-based amorphous powder coating, the coating is prepared by a supersonic flame spraying technology, and the surface of a matrix is subjected to oil removal and rust removal treatment, and then is subjected to pretreatment such as sand blasting. The coating which is low in porosity, high in hardness, excellent in anti-cavitation property and excellent in corrosion resistance can be obtained. The iron-based amorphous powder is suitable for demanding components such as marine hydraulic machinery, key components of nuclear submarines, parts of engines of airplanes, and bosses of blades of aviation engines, particularly has advantages in a severe marine environment, facilitates industrialization, and is wide in application prospect.