The invention discloses a testing device and a method of ground deformation caused by simulating metro shield tunnel construction, and belongs to the technical field of underground engineering experiments. The overall process that similar materials are used for simulating soil layer structures, a tunnel simulating device is used for simulating tunnel structures, and a ground loss simulation system is used for simulating disturbed soil around a tunnel and ground loss is included. After the installation of the device is completed, the ground loss simulation system is started, an airtight water bag which is filled with water by using a pressure water pump in advance is drained step by step through a drain pipe, and water discharge is accurately controlled through a water stop valve and a measuring tank. Moreover, the water discharge is recorded, the ground loss is simulated, a corresponding stratum is deformed, and then the earth surface subsides, the surface subsidence is accurately measured through a dial indicator, and a measured value is recorded. Stratum loss ratio is calculated out through conversion, and the stratum loss ratio and the subsidence measured value are made into forms and images together, and thereby the relation between the stratum loss ratio under different stratum structures and the surface subsidence can be measured out simply, conveniently and accurately.