The invention discloses a process for preparing biomass fuel by using rural town domestic waste and agricultural and forestry waste. The process comprises the steps of step one, waste leachate treatment and foul smell deodorization; step two, waste screening, sorting and coarse crushing; step three, non-organic matter magnetic separation, winnowing and fine crushing; step four, agricultural and forestry waste crushing and screening; step five, stirring of waste combustible materials, agricultural and forestry waste, sludge and water, compression molding, airing and biomass fuel obtaining; andstep six, waste organic matter adding of livestock and poultry manure, and organic fertilizer obtaining. According to the process, the biomass fuel can be directly used in a boiler, and the problem that the livestock and poultry manure pollutes the environment in a livestock farm is solved through the organic fertilizer; for the construction of waste treatment plants, the investment is small, thecost is low, and implementation is easy; the agricultural and forestry waste is collected with paying performed, so that the income of farmers is increased, and the pollution is reduced; the profit rate is high, and operating can last without government subsidy; the waste gas, the waste liquid and the waste residue are subjected to the environmental protection treatment so that new pollution can be avoided.