The invention discloses an insulated gate type source-drain composite field plate transistor with high electron mobility and a fabrication method thereof. The transistor comprises a substrate, a transition layer, a barrier layer, a source electrode, a drain electrode, an insulated gate electrode, a passivation layer, a source field plate, a drain field plate and a protection layer from bottom to top,; the source field plate is electrically connected with the source electrode, the drain field plate is electrically connected with the drain electrode, wherein, an insulation medium layer is deposited on the upper part of the source electrode, the upper part of the drain electrode as well as the upper part of the barrier layer between the source electrode and the drain electrode; and n floating field plates are deposited on the passivation layer arranged between the source field plate and the drain field plate. All the floating field plates have the same size and are mutually independent in floating state, and the floating field plates are equidistantly distributed between the source field plate and the drain field plate. The n floating plates, the source field plate and the drain plate are completed on the passivation layer by one-time process. The transistor has the advantages of simple process, strong reliability and high breakdown voltage, and the transistor and the fabrication method can be used for fabricating high power devices based on a wide band gap compound semiconductor material heterojunction.