The invention discloses an anti-bacterial and flame-retardant PVC composite board and a processing method thereof, wherein the anti-bacterial and flame-retardant PVC composite board includes the following raw materials in parts by weight: 100 parts of PVC resin, 5-10 parts of an acrylic acid-maleic anhydride copolymer, 40-60 parts of wood meal, 40-60 parts of modified calcium carbonate, 5-10 partsof shell powder, 3-5 parts of boron nitride, 1-3 parts of aramid fibers, 2-4 parts of a foaming agent, 1-2 parts of a flame retardant, 1-2 parts of an antibacterial agent, 1-3 parts of a plasticizer,0.5-1.5 parts of a stabilizer, 0.5-1.5 parts of an antioxidant, 2-4 parts of a modifier and 3-5 parts of a processing aid. The modifier consists of octaaminophenyl cage-like silsesquioxane and vegetable oil fatty acid alkanolamide borate with a mass ratio of (1-3):1. The prepared PVC composite board has the advantages of high strength, strong impact resistance, no fission, good flame retardancy,strong antibacterial property, low water absorption rate, wear resistance, weather resistance, heat resistance, difficult deformation, aging resistance, good processing performance, simple process, low cost, and good social and economic benefits.