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This invention discloses a reactor for water-gas shift reaction and its application. The reactor is suitable for water-gas shift reaction processes containing gaseous and liquid reactants. A reaction chamber is set inside a hollow, sealed cylinder formed by the reactor walls. The reaction chamber is a hollow, sealed chamber surrounded by porous material as its wall surface. A gaseous reactant inlet pipe penetrates the reactor wall and extends into the upper part of the reaction chamber, a liquid reactant inlet pipe penetrates the reactor wall and extends into the cylinder, and a reaction product outlet pipe penetrates the reactor wall and extends into the lower part of the reaction chamber. The catalyst for the water-gas shift reaction is packed in the reaction chamber. The water-gas shift reaction can be carried out under near-isothermal conditions. Water in the liquid reactant does not need to be pre-vaporized and is directly fed into the reactor in liquid form, saving the energy consumption required to transport the corresponding amount of water vapor. Simultaneously, a high molar ratio of water to carbon monoxide is maintained within the reactor, promoting complete conversion of carbon monoxide.