The invention belongs to the technical field of target material preparation, and particularly relates to a high-performance nickel-iron alloy sputtering target material and a preparation method thereof. The preparation method comprises the steps that 1, hot forging is conducted on a nickel-iron alloy ingot; 2, the microstructure of nickel-iron alloy is controlled through the cold rolling process and the heat treatment process, and rolling deformation with the total deformation being 1%-20% is conducted on a target billet, so that the magnetic conductivity of the target material is decreased; and 3, the high-performance nickel-iron alloy sputtering target material is obtained through machining. According to the high-performance nickel-iron alloy sputtering target material and the preparation method thereof, the preparation method is simple and suitable for manufacturing target materials of various sizes, the magnetic conductivity of the target material can be decreased, the microstructure is made to be uniform, the average grain size is made to be between 20-100 microns, and the crystallization orientation of the sputtering surface of the target material is irregular.