The present invention discloses a liquid-cooled integrative power system for electric forklift and a control method thereof. It includes an integrated transmission gearbox, an integrated motor controller, an oil pump and a vehicle controller. The integrated transmission gearbox includes a drive motor transmission mechanism and an oil pump motor transmission mechanism. The integrated motor controller includes a control unit for a drive motor and a control unit for an oil pump motor. The integrated transmission gearbox, the integrated motor controller, the drive motor, the oil pump motor, the oil pump and the vehicle controller are completely integrated and mounted to form the liquid-cooled integrative power system for electric forklift. The vehicle controller comprehensively controls the integrative power system.