The invention discloses a generator air gap measuring device and a measuring method thereof. The device comprises a laser displacement sensor (1) obliquely fixedly connected to a stator core of the generator and a magnetic pole of a rotor and a key phase sensor (2) fixedly connected to one side of the top end of a guide bearing, wherein the side surface of the guide bearing is fixed with a metal target piece (3); the laser displacement sensor (1) and the key phase sensor (2) are connected with a first wireless transceiver module (4) and a wireless transmitting module (5); and a PC (6) connected to a second wireless transceiver module (7) is arranged outside the generator. In the measuring method for the above device, when the key phase sensor senses the rotating speed of the generator is average, the laser displacement sensor measures the distance between the stator core and the rotor magnetic pole, and air gap measurement is completed. The measuring accuracy can be improved, and the advantages of high measuring efficiency and good measuring effects are also achieved.