The invention provides a method for processing low-grade heavy oil. The method comprises the following steps of: carrying out selective solvent deasphalting on low-grade heavy oil to obtain deasphalted oil; mixing the deasphalted oil or other heavy-oil raw materials with hydrogen and hydrotreating to obtain hydrogenated heavy oil; carrying out catalytic cracking conversion on the hydrogenated heavy oil serving as a catalytic cracking raw material, wherein liquid light products and heavy oil slurry are obtained in the catalytic cracking process and the liquid light products include gasoline, diesel and/or liquefied gas; and mixing the heavy oil slurry obtained by catalytic cracking with low-grade heavy oil raw material subjected to selective solvent deasphalting. The method provided by the invention is a combined method for processing the heavy oil with a high content of impurities into vehicle gasoline and diesel and is suitable for processing low-grade heavy-fraction oil with high content of sulfur, nitrogen, metals and asphaltene or high carbon residue or such heavy oil with high content of impurities as residual oil. The technology for processing the low-grade heavy oil has the characteristics of high yield of gasoline, diesel and liquefied gas components, high product quality and low discharge of environmental pollutants.