The invention relates to a deep groove ball bearing with both a displacement compensation function and a vibration reduction function. The deep groove ball bearing is used for compensating for part machining errors and errors which are caused in the installation process and has the vibration reduction function. The deep groove ball bearing comprises outer rings, inner rings, rolling bodies, retainers, isolation rings, electromagnetic coils, spiral oil seal grooves and magnetorheological fluid. Annular grooves approximately in arc shapes are formed in the inner rings of the bearing. The two ends of each annular groove are provided with the corresponding spiral oil seal grooves. The middle portions of the annular grooves are filled with the magnetorheological fluid. The spiral oil seal grooves in the two ends are filled with oily objects, and the oily objects are used for sealing the magnetorheological fluid and called oil seals. The oily objects have the characteristics of high viscosity and low fluidity, and mutual dissolution between the oily objects and basic carrier liquid in the magnetorheological fluid is avoided. The grooves are formed in the inner rings of the bearing, and the electromagnetic coils are wound in the grooves and isolated from the magnetorheological fluid by the isolation rings. The deep groove ball bearing with both the displacement compensation function and the vibration reduction function has the characteristics that the structure is simple, operation is easy and convenient, and the driving torque can be controlled.