The invention discloses a step-by-step type bulging and punching compound die and a working method thereof. The compound die comprises a die rack portion, an upper die portion and a lower die portion. The die rack portion comprises an upper die base, a lower die base, a guide pillar and a guide sleeve. The guide pillar is fixed on the lower die base through close fit and the guide sleeve is arranged between the guide pillar and the upper die base. The die structure of a related forming process is simplified, so that the bulging or drawing step and the punching step can be achieved step by step in one station, and therefore, the work efficiency is increased; meanwhile, the stability and quality of a metal plate forming part are also very good.