The present invention provides a method for processing low-grade heavy oil, comprising: providing a riser-bed reactor; preheating the low-grade heavy oil and injecting it into the riser reactor to react with solid catalyst particles at the temperature of 550-610° C.; oil-gas, after reacting with the solid catalyst particles in the riser reactor, being introduced into the fluidized bed reactor to continue to react at temperature of 440-520° C. and weight hourly space velocity of 0.5-5 h−1; and the oil-gas, after reacting in the fluidized bed reactor, being separated from coked solid catalyst particles carried therein, and the separated oil-gas being introduced into a fractionation system. The method can effectively remove carbon residues, heavy metals, asphaltenes and other impurities from the low-grade heavy oil, and obtain high liquid product yield in a simple process.