The invention relates to an argon-oxygen furnace and an operation method thereof. The argon-oxygen furnace is characterized in that: I, the physical and chemical indexes of a magnesium-calcium brick for the working layer of a furnace lining meet requirements; II, a total included angle of blower guns is 108 to 120 DEG, the distance between the blower guns is no less than 380 mm, and the blower guns, blower gun bricks and adjacent bricks are bonded by using resin mortar; and III, the furnace lining undergoes maintenance and baking. The operation method is characterized in that: I, the content of Si in pre-melting liquid of smelting is no more than 0.30%; II, during blowing, the integral argon-oxygen furnace is backwardly revolved and tilted by 3 to 7 DEG; III, air feeding intensity of a top gun during decarburization in stage 1 to 3 is 0.85 to 1.40 Nm<3>/min.t; IV, the basicity of slag is 1.8 to 2.2; V, no-load time is less than 90 min, a furnace mouth is swayed down to 120 to 240 DEG, and if no-load time is greater than 90 min, on-line baking is carried out; and VI, temperature monitoring is carried out on steel plate surface temperature corresponding to easy-leaking points of the blower guns and slag lines in the whole process of furnace smelting. With the argon-oxygen furnace and the operation method thereof in the invention, the furnace life of the argon-oxygen furnace is prolonged to no less than 160 heats.