The invention is applicable to the technical field of substation safety protection and provides a substation fire monitoring and alarming system and method. The system comprises a monitoring unit anda terminal unit, wherein the terminal unit comprises a first processor, a first wireless transceiver, a plurality of first electromagnetic locks, a plurality of second electromagnetic locks, a plurality of fire detectors and a plurality of first alarms; one fire detector is arranged at the preset position in each device room; one first alarm is arranged at the gate of each device room; one first electromagnetic lock is arranged on the gate of each fire hydrant; one second electromagnetic lock is arranged on the gate of each device room; the first wireless transceiver, the plurality of fire detectors, the plurality of first alarms, the plurality of first electromagnetic locks, and the plurality of second electromagnetic locks are connected with the first processor; and a display in the monitoring unit, a second wireless transceiver and a second alarm are connected with a second processor. The problem that a fire place can not be quickly positioned in the case of fire of the substation can be solved.