The invention provides an internal combustion engine with fuels being mixed and ignited on the spot and a control method thereof, in particular preparation, feeding and combustion control of fuels ofa combustion engine. A set of high-cetane and high-octane fuel feed and control system is additionally arranged in the internal combustion engine, and the system comprises a mixed fuel electronic control unit (8), a high-octane fuel box (9), a high-octane fuel pressure regulator (10), a high-octane fuel nozzle (13), a high-cetane fuel nozzle (14), a high-cetane fuel pressure regulator (17) and a high-cetane fuel box (18); and by controlling the high-octane flue nozzle, the high-cetane fuel nozzle and an ignition module, the spot mixing, the mixing ratio control, the excess air coefficient control and the ignition control of high-octane fuel and high-cetane fuel are achieved. The invention avoids accidental fire of the traditional single-fuel spark-ignition internal combustion engine in a cold starting process, improves the idling performance and the intermediate-speed and high-speed performance of the internal combustion engine effectively, and achieves the aims of energy saving and emission reduction of all working conditions of the internal combustion engine.