Under the action of acid catalyst, the phenol and formaldehyde are condensed by heating and then alkylated with terpene. The reaction temperature is 95-210 ℃. When the reaction temperature of 160 ~ 210 ° C, adding the appropriate amount of bleaching agent. And the low-boiling components are distilled off. The terpene phenolic resin produced by this method has the advantages of light color, high softening point and good oil solubility. Can replace the expensive tert-butyl phenolic resin and can be applied to paint, ink, cable, printing, rubber, plastics, adhesives and other industries.