An embodiment of the invention discloses an agricultural automatic mulch laying system and a mulch laying method thereof. The agricultural automatic mulch laying system comprises an automatic traveling device and a mulch laying device, wherein the mulch laying device is mounted on the automatic traveling device and comprises a fixed rack, control wheels, covering blades, a mulch guiding roll and adjusting units; the control wheels and the covering blades are arranged on the fixed rack; the mulch guiding roll is arranged in front of the control wheels; the adjusting units include a first adjusting unit and a second adjusting unit; the first adjusting unit is arranged on the control wheels; and the second adjusting unit is arranged on the covering blades. Two sides of a plastic mulch are pressed tightly through the control wheel; after soil is scooped up by the covering blades, the soil covers two sides of the plastic mulch; the pressing heights of the two control wheels, the distance between the two control wheels, the soil digging depth of the two covering blades and the distance between the two covering blades are adjusted through the two adjusting units; after mulch laying is finished, the fixed rack shears off the plastic mulch and retracts automatically. The system is high in mechanical degree, the labor intensity is saved, and the working efficiency is good.