Disclosed are a paper currency fold recognition apparatus and method. The paper currency fold recognition apparatus comprises: a laser source (4), a rectangular grating (3), an area array photoelectric sensor (6), an imaging lens group (5), and a signal processing module (7), wherein the laser source (4) is used for emitting laser light; the rectangular grating (3) is located above the laser source (4) and used for modulating, on the surface of paper currency (2), the laser light into stripes which change to be bright or dark in accordance with certain rules; the area array photoelectric sensor (6) is used for image acquisition; the imaging lens group (5) is located above the area array photoelectric sensor (6) and used for converging an image of the surface of the paper currency onto the area array photoelectric sensor (6); and the signal processing module (7) is electrically coupled with the area array photoelectric sensor (6) and used for processing an image signal. The paper current fold recognition method realized by the apparatus turns a detection of whether or not there is a fold on the paper currency into a detection of whether or not there exists warping of the grating strip feature images for projection of the grating, thereby effectively avoiding the influence on paper current fold recognition caused by a color shift phenomenon that is due to a change in the gray value of the acquired paper current images at different temperatures, and also improving the rate of paper currency fold recognition.