The disclosure relates to the technical field of alloys, and in particular to a titanium alloy with a gradient microstructure and a preparation method thereof. Two new gradient microstructures different from the existing microstructure in titanium alloy are designed for the first time by an ingenious three-step heat treatment scheme, specifically, the gradient lamellar microstructure and gradient tri-modal microstructure. Compared with the regular uniform lamellar microstructure, the titanium alloy with gradient lamellar microstructure can achieve the simultaneous improvement of strength and ductility. Compared with the regular bimodal microstructure, the strength of a titanium alloy with a gradient tri-modal microstructure can be increased by about 10%, and the ductility is slightly reduced.