The invention discloses an inverted punching and riveting machine and a riveting method thereof. The punching and riveting machine comprises a worktable, a fixture, a punch and an oil cylinder, the punch consists of one or more than one punch needles, an upper die and a lower die, the punch and the oil cylinder are arranged on the lower side of the worktable in an inverted manner, a top plate, a slider and a sensing device with a magnet and a check block are disposed on the upper side of the worktable, the slider is used for mounting the fixture and is limited by the sensing device with the magnet and the check block, a pre-tightening device for tightening the fixture in advance is arranged on the punch, the oil cylinder is fixedly connected with the lower die, the punch needles penetrate through the upper die, and the lower end surface of each punch needle is abutted onto the lower die. The punch and the oil cylinder are arranged on the lower side of the worktable in the inverted manner, accordingly, the structure of the punching and riveting machine is compact and small, spaces are saved, the gravity center of the punching and riveting machine is low, a plurality of rivets can be simultaneously placed on workpieces to be riveted in advance and are punched to deform by the aid of the punch needles at one step, machining efficiency is greatly improved, and the rivets are impacted in a closed area and are quite safe.