The invention provides an herbal pesticide and a preparation method thereof. The preparation method is characterized by comprising crushing stropanthus divericatus, graceful jesamine, flaccid knotweed herb, encalyptus robusta, camphorwood leaf, melia azedarach leaf, wikstroemia indica, derris root, tobacco, ailanthus altissima leaf, Chinese tallow tree leaf, pod pepper, sessile stemona root, ilex rotunda, lantana camara, peach leaf, lemon leaf and datura, adding the crushed materials into water of which the weight is 5-10 times total weight of the crushed materials, carrying out reflux stewing at a temperature of 80 to 100 DEG C for 30 to 90min, and filtering to the herbal pesticide. The herbal pesticide has a wide insecticidal spectrum, low toxicity and no damage on human and animals, can be biodegraded completely, does not produce residues, guarantees agricultural product safety, and is suitable for production of organic agricultural products.