The invention discloses a least squares reverse time migration method based on multi-source hybrid dynamic coding. In multi-source coding least squares reverse time migration, a multi-source coding matrix is firstly used for converting a single-shot gather component into a super-shot gather, then the super-shot gather is used for defining a target function of an estimated refection coefficient; cross term noise is introduced into a least squares reverse time migration result, an encoder matrix at each stage is selected to serve as an orthogonal matrix, and each sub-question is formed by using a hybrid coding mode. According to the least squares reverse time migration method based on a bi-directional wave equation theory and an inverse theory provided by the invention, amplitude with more fidelity can be provided, the image is more focused, a seismic offset result with less false appearance is imaged, and thus seismic interpretation difficulty and a petroleum reservoir exploitation risk are reduced. Meanwhile, according to the multi-source coding method provided by the invention, enhancement of computation efficiency and suppression of cross item noise of coding can be well achieved during a least squares reverse time migration iteration process.