The invention relates to an inner loop reactor with reacting and separating functions. The reactor comprises a rising pipe, a downspout, a solid feeding port, a hydrocyclone inlet, an anti-flowing dead zone internal component, a liquid inlet, an air inlet, an air outlet, a flow guide drum, an air flow guide cone, an air vent, an overflow port, a hydrocyclone, a bottom flow port, an air-liquid integrated distributor and a liquid outlet, wherein the hydrocyclone is arranged at the lower part of the downspout of the loop reactor; the air flow guide cone and the air vent exist in the downspout, so that air can be prevented from entering the hydrocyclone; after the slurry enters the hydrocyclone, the solid-containing slurry enters the rising pipe through the bottom flow port, and clean products without solids flow out from a top flow port; and an external valve is used for controlling the flow of the clean products. The inner loop reactor has a simple structure, is low in cost, requires no special liquid-solid separating device, can simultaneously perform air-liquid-solid three-phase reaction, mass transfer and separation, and is suitable for the air-liquid-solid three-phase reaction taking solid grains as catalysts.