The invention relates to a soft package battery and a preparation method thereof. The soft package battery comprises: a first package member formed with a first sealing cavity; a second package memberformed with a second sealing cavity and arranged in the first sealing cavity, wherein a third sealing cavity is formed between the second package member and the first package member; a battery cell arranged in the second sealing cavity; an electrolyte arranged in the second sealing cavity; and insulation liquid arranged in the third sealing cavity. Two layers of package members are arranged at the periphery of the battery cell, and a protection region filled with the insulation liquid is arranged between the two layers of package members; after the internal portion of the soft package batteryis in short circuit, the package members at the inner side are damaged, the insulation liquid of the protection region flows into the battery cell to sharply increase the internal resistance and greatly reduce the short-circuit current, the reaction of the battery cell can be blocked from the internal portion of the soft package battery, the heat discharge of the soft package battery is reduced,the risk of generation of thermal runaway and even explosion of the soft package battery can be reduced, and the potential safety hazard is reduced.