The invention provides a car driver and passenger life-saving escape system and an operation method thereof, which can quickly eject a driver and passengers out of a car with a narrower space under the extremely-dangerous situations that the car is strongly collided, overturns at a high speed, burns and explodes, falls off, or is caught in water, so as to reduce the probability of severe disability and death. The car driver and passenger life-saving escape system comprises a system control device, a car emergency alarm, an automatic braking flameout controller, an ejection seat, an emergency separation type ceiling, an elastic protection mesh film and the like. When the severe accidents are happened to the car, the driver manually triggers the car or the car automatically triggers when a system control module detects that the relevant value exceeds the critical value to send out alarm and braking flameout information and generate instantaneous high-pressure gas, so as to prop the emergency separation type ceiling open and drive seats, the driver and the passengers to be ejected towards the upper rear side of the car; and meanwhile, the elastic protection mesh film arranged in the ceiling is instantaneously pulled out to carry out elastic pullback on the driver and the passengers, so that the speed of the driver and the passengers to the ground is reduced, and the casualties are further reduced.