The invention discloses an enclosed methanol-water steam reforming fuel cell hydrogen source system, which comprises a methanol supplying device, a liquid oxygen device, a carbon dioxide storage device, a water storage device, and a methanol hydrogen producing device; wherein the methanol hydrogen producing device comprises an evaporation device, a reforming device, a combustion device, a carbon monoxide selective oxidation reactor, and other auxiliary systems; and the combustion device, reforming device, evaporation device, and carbon monoxide selective oxidation reactor are integrated into a module. According to the hydrogen production method, methanol and water are gasified by the evaporation device and then react in the reforming device to obtain reformed gas; then the reformed gas is processed by the monoxide selective oxidation reactor, the concentration of carbon monoxide in reformed gas is further reduced, and finally the reformed gas is introduced into the fuel cell system to carry out electrochemical reactions. The provided system has the advantages that the system operates in an enclosed space, the operability and safety of the system are both improved; the heat exchange and reactions are well matched, and the whole reforming hydrogen production system is high efficient and compact.