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This invention discloses an air separation system and method for co-producing hydrogen, belonging to the field of air separation and hydrogen production technology. It includes four oxygen-permeable membrane reactors and two condensers. The oxygen-producing outlet of the fourth oxygen-permeable membrane reactor (R4) is connected to the second condenser (C2), which has a condensate drain outlet and an oxygen outlet. The nitrogen-producing inlet of the third oxygen-permeable membrane reactor (R3) is connected to the air-producing outlet of the fourth oxygen-permeable membrane reactor (R4). The fuel-producing inlet of the second oxygen-permeable membrane reactor (R2) is connected to the fuel-producing outlet of the third oxygen-permeable membrane reactor (R3). The fuel-producing inlet of the first oxygen-permeable membrane reactor (R1) is connected to both the fuel-producing outlet and the hydrogen-producing outlet of the second oxygen-permeable membrane reactor (R2), and the hydrogen-producing outlet of the first oxygen-permeable membrane reactor (R1) is connected to the first condenser (C1), which has a condensate drain outlet and a hydrogen outlet. This invention simultaneously produces hydrogen, oxygen, and nitrogen through a reasonable process arrangement. The method is simple, efficient, and highly economical and practical.