The invention discloses an onion peeling method and further discloses a peeling machine implementing the method. The peeling machine comprises a feeding platform, a cleaning and conveying platform, a classified screening mechanism, a lifting conveyor, an onion distributor, a cutting unit, a separator, a finished product conveyor and a return platform; the onion distributor is arranged above the cutting device; the feeding platform, the cleaning and conveying platform and the classified screening mechanism are arranged and connected in sequence; one end of the lifting conveyor is connected with the classified screening mechanism and the other end is connected with the onion distributor. The method provided by the invention has simple steps, is easy to realize and capable of quickly peeling onions and has good peeling effect and high work efficiency; the peeling machine provided by the invention has the advantages of smart and rational design, easy operation and high peeling effect; the work efficiency is the workload of about 20 persons, the work environment is improved greatly, the labor intensity is reduced greatly and the processing cost is saved; and the peeling machine is beneficial to enterprise development and beneficial to wide promotion and application.