The invention provides a bobbin insertion system of an automatic bobbin winder and a bobbin insertion method. The bobbin insertion system of the automatic bobbin winder comprises a control system, a bobbin yarn conveying device, a bobbin yarn large and small end judgment device, a bobbin yarn release device, a fixed hopper, a movable hopper, a tray channel and trays. The bobbin insertion system of the automatic bobbin winder is characterized in that an extensible baffle which is connected with a driving mechanism is arranged between the fixed hopper and the movable hopper, and a sensor which is used for detecting whether bobbin yarn exists in the fixed hopper or not is arranged nearby the fixed hopper, and is connected with the control system; the driving mechanism drives the extensible baffle to block or leave the lower end opening of the fixed hopper, and the bobbin yarn which enters the fixed hopper perpendicularly stands on the extensible baffle; and when one tray exists below the movable hopper and waits for bobbin insertion, the driving mechanism drives the extensible baffle to rapidly leave the lower end opening of the fixed hopper, the bobbin yarn in the fixed hopper vertically falls into the movable hopper in a mode that the large end of the bobbin yarn is downward, and then the bobbin yarn is vertically inserted into the tray. According to the bobbin insertion system of the automatic bobbin winder, the structure is simple and compact, the bobbin insertion capacity can be improved, the bobbin insertion time sequence is reasonable, the bobbin yarn falling time can be shortened, and the bobbin insertion efficiency can be improved.