The invention discloses a device capable of identifying the train number and conducting location tracking and an operating method thereof. A center acquisition device is connected with a machine room controlling and monitoring device through the network, the machine room controlling and monitoring device is in communication with an automatic train number identification device, dual power supplies are connected to the automatic train number identification device, the center acquisition device and the machine room controlling and monitoring device, wheel sensors are installed on each rail of a train and on the throat portion of a main inlet of the train, the automatic train number identification device is installed on the throat portion of the main inlet too, a main server is connected to the machine room controlling and monitoring device, the wheel sensors installed on each rail of the train are in communication with the center acquisition device, and the wheel sensors installed on the throat portion of the main inlet are in communication with the automatic train number identification device. The device has the advantages that working efficiency is high, management is convenient, zero-velocity detection of wheels is achieved through the wheel sensors provided with source magnetic steel, vehicle and axle errors are effectively avoided, real-time detection is realized, and vehicle information and positions can be learnt in time accurately.