The invention relates to a system and a method for removing phosphorus by three-mud process nitrification and denitrification. The system comprises a pretreating unit, an anaerobic unit, a middle precipitation unit, a primary aeration biological nitrification unit, an anoxic unit, a secondary precipitation unit and a secondary aeration biological nitrification unit. The method comprises the following steps that: after being precipitated in the pretreating unit for removing oil, the primary water enters an anaerobic pool with returned sludge to anaerobicly release the phosphorus; microorganisms absorb polyhydroxyrate (PHB) in a dissoluble organic compound body in the water; after muddy water is precipitated in a middle precipitation pool, a supernatant enters the primary aeration biological nitrification unit and an effluent and sludge in the middle precipitation pool enter an anaerobic pool to undergo denitrification and dephosphorization; and after mixed solution in the anaerobic pool is separated in a secondary precipitation pool, the supernatant enters the secondary aeration biological nitrification unit for further treatment, wherein one part of the sludge is reclaimed and theother parts of the sludge are discharged as remaining sludge. The system of the invention is small in occupied area and low in basic construction and operation costs. For low-carbon and nitrogen urban sewage, the effluent of the system can stably meet the first grade A standards of Urban Sewage Disposal Plant Contamination Integrated Discharge Standard.