A method for preparing iron alloy and a cement material, in the field of solid waste recycling, provides an efficient, synergistic effect between main components of carbon, calcium and heavy metal in municipal solid waste incineration (MSWI) fly ash and main components of iron, aluminum and silicon in red mud, so that the iron alloy and cement material can be readily obtained. By using waste to treat waste and using the complementarity of the components of two waste streams, carbon in the MSWI fly ash may provide a reductant to accelerate an iron mineral in the red mud to reduce into metal iron. With the formation of the metal iron, a siderophile heavy metal element in the MSWI fly ash is also accelerated to enter an iron phase. Meanwhile, the cement material is formed by Al2O3 and SiO2 in the red mud and CaO in the MSWI fly ash.