The invention provides a double-purpose rewinding machine for preparing cored toilet paper and coreless toilet paper and a method thereof. The rewinding machine comprises an upper rewinding roller, a lower rewinding roller, a rewinding compression roller and a paper tube core feed mechanism, wherein the upper part of the lower rewinding roller is provided with a plurality of double-purpose guide plates; the double-purpose guide plates are used for roll set at the time of winding the coreless toilet paper and leading-in of a paper tube core at the time of winding the cored toilet paper; the lower rewinding roller is provided with a plurality of grooves capable of accommodating the double-purpose guide plates; and the double-purpose guide plates can be lifted properly from the grooves of the lower rewinding roller under the condition of being driven by a second driving mechanism at the time of rewinding the coreless toilet paper, thus peaks at the front ends of the double-purpose guide plates can contact with the surface of the upper rewinding roller. In the invention, a double-purpose guide plate structure is additionally arranged at the upper part of the lower rewinding roller skillfully, and the lifting and descending of the front ends of the double-purpose guide plates in the grooves of the lower rewinding roller are utilized, thus being capable of reliably and fast realizing the rewinding of the two types of toilet paper, improving the production efficiency, producing the cored toilet paper and coreless toilet paper at the same time only by one machine for manufacturers, and reducing the production costs.