The invention discloses an underground positioning system and a method, the system comprises a ground control console, a plurality of gateways, a data transmission line, a bus, a plurality of receiving nodes, a plurality of wireless beacons and a plurality of mobile nodes, wherein a three-layer wireless network which comprises the receiving nodes, the wireless beacons and the mobile nodes is used, through a wireless sensor communication network (WSN), broadcast is initiated by the wireless beacons, is received by the mobile nodes and is transmitted to a broadcast-repeater positioning mode of the receiving nodes to position, thereby increasing the positioning accuracy of the system for a static object and a moving object.