The invention discloses a novel method of the harmless treatment and utilization of livestock and poultry which died of disease according to the steps as follows: firstly, various kinds of the animal bodies of the livestock and the poultry which died of disease are collected; secondly, the animal bodies are crushed; thirdly, the crushed animal bodies are sterilized under high temperature and highpressure and separated for filtering, the material of oil and fat flows into a cooling pool, and the material of hair and bone is dried; fourthly, the material of hair and bone after drying is carbonized; fifthly, the material of oil and fat after cooling is added with catalyst, high-efficiency compound microorganism, trash, organic wastewater and sludge; sixthly, the mixed organic material is put into an anaerobic tower to be fermented, and then biogas, biogas slurry and biogas slag are processed for three-phase separation; seventhly, the biogas is used for burning and generating electricity; eighthly, the biogas slurry inside a fertilizer storing pool is used as farmland fertilizer; ninthly, the biogas slag is added with the high-efficiency compound microorganism and the catalyst for secondary ferment; tenthly, the material after the secondary ferment is made into agricultural high-efficiency organic fertilizer. The invention solves the problem of the environmental pollution caused by the livestock and poultry which died of disease and change the waste livestock and poultry which died of disease into valuables.