The invention discloses a color erasing ink and a preparation method thereof. The color erasing ink comprises the following components: 60-65 percent of letterpress resin, 8-10 percent of vat dyes, 15-18 percent of inorganic dyes, and 7-17 percent of stuffing. The preparation method comprises the following steps of: accurately weighing the letterpress resin, the vat dyes and the inorganic dyes and placing same to a container, stirring; uniformly adding hydrosilicate into a container, stirring; and after grinding by using a three-roller grinder, canning the finished ink. The invention has the advantage that because the ink is prepared by mixed colorants and contains pigments and dyes, when a water droplet drips on a printing product, a dye component disperses on the periphery of the water-drop, an ink image can be erased when slightly wiping and a dye pattern under an ink layer is revealed. Moreover, the ink has stable and reliable discoloration effect and remarkable anti-counterfeiting effect.