The invention discloses an aligning tool and method for engine testing. The aligning tool includes an engine aligning shaft (2), and a convex ridge aligning plate (3) and a concave ridge aligning plate (4) in ridge fit with each other. A fake shaft is connected to the output terminal of an engine (1) in a manner of being coaxial with an engine shaft. One of the two aligning plates is mounted in a manner of being coaxial with a shaft of a dynamometer (6) while the other one is mounted in a rotary sleeving manner of being coaxial with an aligning shaft of the engine. The aligning method includes aligning tool mounting steps, pre-aligning steps, alignment checking steps and fine alignment steps. Deviation between the two shafts is amplified by utilizing the diameters of the aligning plates and alignment precision can be guaranteed through fine processing of the ridges. During alignment operation, pre-alignment can be performed by utilizing a straight edge knife and through rotation and alignment between peripheral ridge faces and alignment between middle end faces are realized through adjusting the engine, so that the alignment process is implemented. The aligning tool and method is simple and direction in operation and high in alignment operation efficiency, and requires little manual experience.