The present invention relates to the technical field of bedding textile articles, and specially discloses a preparation method of a bed sheet fabric with effects of mite repelling and insect prevention. The preparation method comprises: preparing raw material fibers such as bamboo fibers, jade fibers, aloe fibers, flax fibers and polyester fibers, placing the polyester fibers into a sodium hydroxide solution containing diatomaceous earth and shellac, soaking, spinning a bed sheet fabric from the soaked polyester fibers and other raw material fibers, placing the obtained bed sheet fabric into an insect prevention agent, immersing and cooking, placing for 20 min at a temperature of 5 DEG C, placing for 20 min at a temperature of 75 DEG C, carrying out high temperature and low temperature alternating standing 3-5 times, and carrying out other operations, wherein the insect prevention agent is prepared from sunflower seed, rapeseed, cnidium monnieri (l.)cuss, rheum palmatum l, rhus chinensis mill, leonurus artemisia, fructus kochiae, clove, sulfur soap powder, metronidazole, camphor ball, and the like. According to the present invention, the bed sheet fabric has lasting and effective effects of mite repelling and mite growth inhibition, and can provide a clean sleeping environment.