The invention discloses a multifunctional combustion testing device and method for simulating engine conditions, and belongs to the field of internal combustion engines. The device comprises a device main body, main body quartz glass, a main body quartz glass gland, an end cover, a piston, piston quartz glass, and a piston quartz glass gland. The interior of the device main body is a hollow cylinder, and the end cover is mechanically connected at an axial section of the device main body. A boss is located in the device main body, and the main body quartz glass is located in an optical through hole of the main body. The main body quartz glass gland is located on a plane of the front segment of the device main body, and is mechanically connected with the front segment of the device main body. The piston is located in the quartz glass main body, and can move axially. The piston quartz glass is located in a stepped-shaped optical through hole of the piston, and the piston quartz glass gland is located on the upper end face of the piston and is mechanically connected with the upper end face of the piston. The device can effectively carry out the testing and research of in-cylinder air flow, jetting, initial temperature and pressure, initial air distribution and fuel types, is low in cost of constant volume bombs, is simple in operation, and is high in testing efficiency.