The invention discloses an auto-adjusting type hydraulic damper and an adjusting method thereof. The damper comprises an outer cylinder, an inner cylinder, a damping shaft, an auto-adjusting valve and a suspending type piston assembly. The inner cylinder is connected in the outer cylinder in a sleeved mode. The auto-adjusting valve and the suspending type piston assembly are installed in the inner cylinder in sequence from bottom to top. After the lower end of the damping shaft is fixed in the suspending type piston assembly, the auto-adjusting valve can be connected with the lower tail end of the damping shaft. A first topping up of oil valve block, an oil supplying topping and discharging piston and a first discharging of oil valve block are arranged on the suspending type piston assembly. A second topping up of oil valve block is arranged on the auto-adjusting valve. According to the auto-adjusting type hydraulic damper and the adjusting method thereof, the stationarity of the whole damper and the road holding of four wheels are particularly outstanding, the friction coefficient of the four wheels and the ground is increased, and the obvious braking performance is improved.