The present invention provides an electric wire with excellent cutting-off characteristic and excellent stretching characteristic, and a manufacturing method thereof. The insulated electric wire is obtained through coating an outer peripheral surface of the conductor by an insulator. The insulated electric wire is characterized in that: the insulator is made of no-halogen flame-retardant resin composition; relative to the 100 by mass parts of matrix resin component which comprises 30-85 by mass parts of polypropylene resin, 10-50 by mass parts of polyphenylether resin and 5-30 by mass parts of styrene elastomer, the no-halogen flame-retardant resin composition comprises the following components: 1.5-7 by mass parts of low-density polyethylene (LDPE), 0.9-5 by mass parts of pigment and 10-30 by mass parts of phosphorus flame retardant; the no-halogen flame-retardant resin composition has an island-shaped phase structure. Furthermore the phase area which is equivalent with the island of the island-shaped phase structure and has a major diameter that is above 1.5 mu m; and furthermore in the phase area, the phase area which is formed by the styrene elastomer and the polyphenylether resin which is surrounded by the styrene elastomer forms an island shape.