The invention discloses an error detection device of an electronic reading system of a digital level and a detection method thereof. The detection device comprises a lifting table, a leveling rod anda telescope system; the leveling rod is vertically fixed on a moving planker of the lifting table, and the telescope is arranged in front of the digital level to be detected; an object lens of the telescope is opposite to an object lens of the detected digital level, and an ocular lens of the telescope is opposite to the leveling rod. During detection, the detected digital level observes the leveling rod through the telescope to record read data of the digital level when the leveling rod is arranged at different positions, and determines an error of the electronic reading system of the digitallevel according to a standard deviation formula. In term of the scheme, a detection device with simple structure, compact space and lower price, and a simple, convenient and rapid detection method are adopted on the premise of factually reflecting precision level and reliability level of instruments.