An alternating-current permanent magnet type electric power steering system based on a DSP (Digital Signal Processor) and an electric power steering method belong to the field of automobiles. The electric power steering system comprises a torque turn angle sensor, a vehicle speed sensor, a current sensor, a side acceleration sensor, a yaw acceleration sensor, a motor rotor position sensor, a signal conditioning circuit, a DSP controller, a permanent magnet synchronous motor, a motor drive circuit, a system protection circuit and a communication interface circuit. The side acceleration sensor, the yaw acceleration sensor and the torque turn angle sensor transmit the measured signals to the DSP, after being processed by the DSP through algorithms, the signals such as the electrical angle of the power-assisted motor, the three-phase current and the current vehicle speed are measured by the rotor position sensor, the vehicle speed sensor and the current sensor, and the power-assisted steering and the turn angle control are carried out according to the input signals. With the adoption of the electric power steering system and the electric power steering method, smooth switching between the power-assisted steering control and the vehicle stability is realized, the switching between the turn angle control and the torque control is achieved by a corresponding lower level motor, so that the driving stability of a vehicle and the steering comfort are guaranteed.