A magnetically-controlled isolated multifunctional transformer (5), comprising a magnetically-controlled saturable reactor, wherein primary coils (L1, L2) and secondary coils (L3, L4) are provided on the magnetically-controlled saturable reactor. The transformation ratio of the primary coils to the secondary coils is equal to the transformation ratio of the transformer. Various alternating-current coils (L5, L6, L7, L8) and direct-current coils (L9, L10) of the magnetically-controlled saturable reactor are neither connected to the primary coils and the secondary coils, nor connected to an electric power system. The magnetically-controlled saturable reactor is provided with the direct current coils (L9, L10), the direct-current coils are respectively connected to two thyristors (D1, D2) in series, and the size of a trigger angle of each thyristor is controlled by a control circuit, thereby realizing the continuous adjusting of the size of a reactance value of each primary coil.