The invention discloses a testing device and a testing method for a three-dimensional PIV (Particle Image Velocimetry) internal flow field testing system of a hydraulic retarder. The testing device comprises a driving motor, a transmission case, a pneumatic clutch, a flywheel case, a torsion and rotating speed sensor, a braking shaft, a visualized hydraulic retarder, a visualized testing chamber, a circular guide rail, a synchronizer, a double-pulse laser, CCD (Charge Coupled Device) cameras, a water storage tank, a water pump, a pressure inductor, a pressure reducer, a particle dispenser, an electromagnetic flowmeter and the like; the visualized testing chamber is made of a transparent material and is suitable for an aqueous medium; the braking shaft is driven by an external driving system, is supported by a bearing, passes through a shell of the hydraulic retarder and is connected with a driving wheel of the retarder; the first CCD camera is arranged at the top of the visualized testing chamber and is used for shooting downwards; the second CCD camera and the double-pulse laser are arranged on the circular guide rail and can arbitrarily rotate along the guide rail; and the circular guide rail and the visualized testing chamber are respectively fixed on the base. The testing device and the method disclosed by the invention can be used for carrying out three-dimensional PIV measurement on the internal flow field of the hydraulic retarder and is simple and compact in structure, good in universality and easy to control.