The invention discloses a distributed hybrid power system and a control method thereof. The distributed hybrid power system comprises a vehicle controller, control units and power units, and the number of the power units is corresponding with the sum of special vehicle half shafts. The control method comprises the follow steps that operational instructions of a driver are received; vehicle requirement drive torque and the number of the required power units are determined, demand power of the power units is calculated, and power demand instructions are sent to power unit controllers of the control units; and engine rotating speed, engine torque and driving demand torque are calculated, rotating speed control instructions are sent to engine controllers, torque control instructions are sent to generator control units, power control instructions are sent to battery management devices, and driving control instructions are sent to driving motor controllers, so that devices are controlled towork. Power flow between components of the distributed hybrid power system can be coordinated, a working condition of power parts is optimized, and the aim of improving energy utilization rate of a special vehicle hybrid power system is achieved.