An interactive projection system and an interactive projection method are provided. The interactive projection method includes: generating a virtual canvas by a projector; detecting a handheld device corresponding to a virtual scene by using a depth camera; and projecting a first virtual image corresponding to the virtual scene onto the virtual canvas and projecting a second virtual image corresponding to the virtual scene onto the handheld device in response to the handheld device detected by the depth camera, wherein the second virtual image is different from the first virtual image.