The invention discloses an underground coal separation method and a system. According to the method, a coal preparation plant is integrally built under the ground, a plurality of coal products are conveyed to a product storehouse on the ground through a lifting system or a belt conveyor after washing, and washed gangue is directly used for filling goaf under the ground. According to the coal separation process, a torbanite dense-medium shallow slot is used for separation, slack coal is not washed, coarse slime is recycled by adopting a thickening and classifying cyclone and a high-frequency screen, and fine slime is recycled by adopting a filter press. According to the underground coal separation method, the coal preparation plant is built under the ground, so that the occupied area of an industrial site on the ground is greatly reduced. In addition, the washed gangue is not discharged from a mine, so that the invalid lifting and the transportation cost are reduced, the actual capacity of the mine is increased, additionally, the gangue stacking and processing cost on the ground is reduced, and environmental hazards are reduced. According to the underground coal separation method, the washing process of most coal preparation plants can be satisfied, the application range is wide, and for the construction of coal mines in mountain ravines, limited areas or land difficult to remove, the problem of difficulty in plant location is solved.