The invention discloses an improved UCT sewage disposal system and a treating method thereof, and belongs to the sewage disposal field. The system comprises an anaerobic reaction tank, an anoxic reaction tank and an aerobic reaction tank, wherein, a sewage inlet and a sewage outlet are formed on the anaerobic reaction tank; a rotary cutting eddy current vertical type stirring device is arranged in the anaerobic reaction tank; the anaerobic reaction tank is communicated with the anoxic reaction tank through the sewage outlet; the tail end of the anoxic reaction tank is connected with the anaerobic reaction tank through a recirculation pipe of a mixed liquor; a water outlet of the tail end of the anoxic reaction tank is connected to a water inlet of the front end of the aerobic reaction tank through a conveyance canal; a side wall of the anoxic reaction tank and a side wall of the tail end of the aerobic reaction tank are shared walls; a plurality of recirculation holes of the mixed liquid for recirculating from the aerobic reaction tank to the anaerobic reaction tank are formed on the shared walls; a recirculation pump of the mixed liquid are arranged on the recirculation holes of the mixed liquid; a plurality of aeration devices are arranged in the aerobic reaction tank; and a treating water outlet is formed at the tail end of the aerobic reaction tank. The system has the advantages of simple structure and low operating cost.