The invention discloses a steam extraction power generation and heat supply system of coupling steam extraction and condensing backpressure heat supply and an operation method. The system comprises asteam turbine medium pressure cylinder, a steam turbine low pressure cylinder, a steam condenser, a radial turbo, a cooling device, a steam-water heat exchanger, a first water drain heat exchanger, afirst station heating network heater, a second water drain heat exchanger, a generator and various steam and water pipelines and valves connected with the steam turbine medium pressure cylinder, the steam turbine low pressure cylinder, the steam condenser, the radial turbo, the cooling device, the steam-water heat exchanger, the first water drain heat exchanger, the first station heating network heater, the second water drain heat exchanger and generator; a cooling steam pipeline is connected with the inlet pipe position of the steam turbine low pressure cylinder, and a cooling device and a regulating valve are arranged on the cooling steam pipeline; one part of steam extracted from the steam turbine medium pressure cylinder enters the first station heating network heater to supply heat, and the other part of the steam enters the radial turbo to apply work; drained water produced after heat exchange is performed on the steam through the steam-water heat exchanger and the first stationheating network heater enters into the two water drain heat exchangers to perform cascaded heating on part of heating network return water; and by changing the operation modes of the system in heatingseason and non-heating season, the high-efficiency operation of the system is realized. The system realizes cascaded heating of a heating network, and lowers irreversible losses in the heat exchangeprocess.