Disclosed are an installation device for air gap arrester and installation method thereof. The installation device includes a handheld pole, a wire clamping mechanism provided at the bottom end of the handheld pole for clamping a split wire, a tray provided on the handheld pole for lifting the arrester, an insulating rope provided on the tray, a fixing rope provided on the handheld pole for temporarily fixing the arrester, and a scale provided on the handheld pole for measuring the distance from the bottom end of the arrester to the bottom end of the handheld pole. The installation device for air gap arrester and installation method thereof have high installation efficiency.