The present invention discloses one kind of engine with changeable compression ratio and changeable fuel and its control method. The engine includes one combustion system, one fuel pressure regulating system, one liquid fuel providing system, one gas fuel providing system, one changeable gas valve timing mechanism, one electronic control unit and one sensor module. According to the acquired signal, the electronic control unit determines the current fuel type, regulates the compression ratio, combustion controlling strategy and gas distribution phase of the engine and regulates the pressure of the fuel injector, so as to fit the fuel. The engine of the present invention can burn gas fuel, liquid fuel and mixed fuel, and has compression ratio adjustable in 8-18 and high dynamic performance and economic performance in burning different types of fuel.