The invention relates to a multifunctional detection device suitable for a water transfer channel and a working method thereof. The device includes a casing, wherein the casing is internally fixed with a water tank, the water tank is connected with a driving mechanism, the driving mechanism can drive the water in the water transfer channel outside the casing to enter the water tank to drain out ofthe casing from the water tank, the water tank is internally provided with a detection mechanism used for detecting the water quality of the water in the water tank, the bottom of the casing is provided with a camera mechanism used for acquiring images of the portion under the water surface of the water transfer channel, the detection mechanism and the camera mechanism are connected with a control mechanism arranged in the casing, the control mechanism is connected with the driving mechanism, and the casing is internally further provided with a positioning mechanism connected with the controlmechanism. The device is advantaged in that pollution sources are accurately positioned, and the damage situation of the water transfer channel under the water surface can be checked.