The invention provides a liquid metal current limiting device based on an insulating baffle plate and a liquid metal current limiting method thereof. According to the device, a fast transfer switch and a liquid metal current limiting unit are combined through a mechanical connecting rod so as to enhance the rated current and the current limiting efficiency of a current limiter. The rated current flows through the fast transfer switch and almost has no loss of conduction under the normal working condition; when a short circuit fault occurs, the fast transfer switch is driven to be fast turned on by a metal repulsion plate so that fault current is enabled to be completely transferred to the liquid metal current limiting unit, the metal repulsion plate drives the insulating baffle plate in the current limiting device to move and thus the throughflow hole fluid column in the current limiting unit is enabled to rapidly reduce and contract and strike arc. The arc column in the current limiting unit can be rapidly extruded by the method through mutual staggering of the baffle plate and insulating separating plates so that high-efficiency current limiting can be realized. The liquid metal current limiting device based on the insulating baffle plate is simple in structure and particularly suitable for limiting fault current of the AC/DC system of the field of median and low voltage so as to reduce the burden of circuit breakers and other electrical equipment.