A lithium-based grease and the preparation method thereof are provided. The raw materials for preparing the lithium-based grease include in parts by weight: 75-88 parts of base oil, 0.5-2.5 parts of antiwear agent, 0.1-1.5 parts of antirust agent, 0.1-1.5 parts of antioxidant, 5-25 parts of lubricant, 5-15 parts of thickening agent, and 0.6-2.0 parts of saponifying agent. The raw materials also include hydroxyl compound-containing modified graphene containing quaternary ammonium salt or aromatic ring. The grease has good colloid stability and mechanical stability, can greatly improve the antiwear property. More than that, the grease has excellent oxidation resistance, and can significantly shorten the reaction time of the saponification, reduce the reaction temperature of the saponification.