A handheld electronic device and an operating method thereof are provided. The handheld electronic device includes a first body, a second body, and a moving assembly. The moving assembly includes a sliding module and at least one rotating module. The sliding module is coupled to the second body, wherein the second body is moveable between a first position and a second position. The rotating module is coupled between the first body and the sliding module so that the second body is rotated relative to the first body. The second body is automatically rotated from the second position to a third position to form a first angle with the first body. The second body can be rotated between the third position and a fourth position to form a second angle with the first body, wherein the second angle is greater than the first angle.