The invention belongs to the field of polymer flame retardation and discloses an epoxy resin reaction-type microcapsule fire retardant and a preparation method thereof. The epoxy resin reaction-type microcapsule fire retardant is characterized in that at least one phosphorus-containing fire retardant is utilized as a capsule core; a product of a reaction of at least one curing agent, an epoxy resin and triglycidyl isocyanurate is utilized as a capsule material; a mass ratio of the capsule material to the capsule core is (0.05 to 0.4): 1; and a mass ratio of the epoxy resin to the triglycidyl isocyanurate is (0 to 6): 1. The preparation method provided by the invention comprises the following steps of dispersing the at least one phosphorus-containing fire retardant in at least one solvent,heating, adding a triglycidyl isocyanurate solution and an epoxy resin solution into the heated solution, stirring for a reaction for 10 to 30 minutes, dropwisely adding a curing agent solution into the reaction system, carrying out a reaction process for 1 to 2 hours, heating to a temperature of 70 to 78 DEG C, carrying out a reaction process for 2 to 12 hours, cooling, filtering, washing and drying to obtain the epoxy resin reaction-type microcapsule fire retardant. The epoxy resin reaction-type microcapsule fire retardant has uniform granularity, good liquidity, low water-solubility and good polymer compatibility. Through utilization of the epoxy resin reaction-type microcapsule fire retardant, good flame resistance, good water tolerance and good mechanical properties are obtained.