The present application discloses a composite substrate with a protective layer for preventing metal from diffusing, comprising: a thermally and electrically conductive layer (2) having a melting point of greater than 1000° C., and a GaN mono-crystalline layer (1) located on the thermally and electrically conductive layer (2). At least the side wall of the composite substrate is cladded with a protective layer (3) for preventing metal from diffusing. The composite substrate not only takes account of the homoepitaxy required for GaN epitaxy and improves the quality of the crystals, but also can be used directly to prepare LEDs with vertical structures and significantly reduce costs. The disclosed composite substrate effectively avoids the pollution of experimental instruments by the diffusion and volatilization of a metal material during the growth of MOCVD at high temperature.