The invention provides a circuit for testing the overload tolerance capacity of a series capacitor and a working method of the circuit. The circuit comprises a voltage regulator, a transformer, a current-limiting resistor, a first switch, the series capacitor to be tested, a matching reactor, a discharge resistor and a second switch. The first end of the voltage regulator serves as the input end of the circuit for testing the overload tolerance capacity of the series capacitor, and the second end of the voltage regulator serves as the output end of the circuit for testing the overload tolerance capacity of the series capacitor. The first end of the transformer is connected with the third end of the voltage regulator, the second end of the transformer is connected with the fourth end of the voltage regulator, and the third end of the transformer is connected with the first end of the current-limiting resistor. The second end of the current-limiting resistor is connected with the first end of the first switch. The second end of the first switch is connected with the first end of the series capacitor to be tested, the first end of the matching reactor and the first end of the discharge resistor respectively. The second end of the series capacitor to be tested is connected with the second end of the matching reactor and the ground respectively. The second end of the matching reactor is grounded. The second end of the discharge resistor is connected with the first end of the second switch. The second end of the second switch is connected with the fourth end of the transformer. Accordingly, the circuit achieves the effect of ensuring the quality of the series capacitor.