The invention relates to a construction method of a shield and continuous cutting pile foundation for penetrating through a residential building group. The construction method comprises the following steps that the first step, house investigation and investigation of pipelines around houses are conducted; the second step, pile cutting construction numerical simulation is conducted; the third step, an automatic monitoring instrument is installed; the fourth step, pre-grouting reinforcement is conducted, wherein the reinforcement range includes buildings, the pipelines and planning tool changing points, and the reinforcement mode is a retrograde grouting mode; the fifth step, shutdown and inspection of a shield machine are conducted before pile cutting is conducted; the sixth step, pile cutting tunneling and pipe sheet splicing are conducted; the seventh step, grout supplement and emergent reinforcement are conducted. According to the construction method, pile cutting and penetration can be directly conducted without the operation that the existing buildings are demolished, the idea of energy conservation and environmental protection is met, the investment cost can be substantially reduced, the negative influence caused by demolition is reduced, and the number of the constraint factors of metro line selection is reduced; in addition, shield construction parameters and grouting parameters can be guided according to data which are fed back in real time through automatic monitoring, a comprehensive dynamic construction management system is implemented, the engineering risk is controllable, and the construction cost can be substantially reduced.