The invention belongs to the technical field of compressed air energy storage, and in particular, relates to an isothermal compression air energy storage power generation system based on liquid temperature control and a method thereof. The system consists of an internal temperature control liquid piston, hydraulic power generation equipment, a gas storage tank, a low-pressure pool, a temperature control liquid source, an external temperature adjusting facility, a liquid driving device and a valve; in energy storage, the hydraulic power generation equipment converts electric energy to liquid potential energy, gas is compressed in the internal temperature control liquid piston, generated heat is stored by liquid, and high-pressure gas is fed in the gas storage tank; in power generation, high-pressure gas is expanded for acting in the internal temperature control liquid piston, and the heat is absorbed from the liquid to push the hydraulic power generation equipment to generate electricity; and the liquid in the temperature control liquid source replaces original liquid of the internal temperature control liquid piston to control the temperature of the gas in the liquid piston, so that the liquid temperature control of the temperature control liquid source is realized, and four working modes of an open direct supply operating mode, a closed direct supply operating mode, an afterheat utilization mode and an efficient power generation mode are realized.