The invention discloses a novel steel for a non-magnetic drill collar and a preparation method thereof. The steel for non-magnetic drill collar is made from the following chemical compositions by weight: not higher than 0.03% of C, not higher than 1.0% of Si, 18-22% of Mn, not higher than 0.045% of P, not higher than 0.03% of P, 13.0-18.5% of Cr, 0.4-0.8% of Mo, 0.4-3.0% of Ni, 0.25-0.6% of N andnot higher than 0.10% of Nb. The preparation method comprises the following steps: taking scrap steel, high carbon ferrochrome, low phosphor scrap steel, ferrosilicon and the like as raw materials; primarily melting the raw materials into molten steel by an electric furnace and refining by a nitrogen and oxygen decarburization refinery furnace and an electroslag remelting furnace in three stages,pouring to form keel blocks; and cogging and stretching, cutting ends and rough turning, forging and strengthening, and the like. The steel has stronger resistance to inter-granular corrosion and completely meet Standard method for detecting sensitivity of resistance to inter-granular corrosion of austenitic stainless steel GB / T 4334-2008 and ASTM A262-08; the steel has tensile strength 10-20% greater than API standard, high impact energy up to 100J and twice more than the standard of petroleum and natural gas industries, good magnetic property, relative magnetic permeability mur controllablebelow 1.005 (standard 1.01), excellent forging and machining performances and the like, and is also applicable to machining products such as nonmagnetic stabilizer, nonmagnetic extra-heavy drill rod,nonmagnetic bearing drill rod and nonmagnetic hanging pup joint.