The invention discloses a folding bicycle and a folding method thereof. The folding bicycle comprises a frame, a front fork stem, a handlebar body and a seat, wherein a frame head tube and a frame tail tube are respectively arranged at two ends of the frame; the frame head tube is respectively connected with the handlebar body and the front fork stem; the seat and the frame are fixedly connected. The folding bicycle further comprises a handlebar folding mechanism, a backrest folding mechanism and a rear fork folding mechanism; the handlebar folding mechanism is arranged in handlebar bodies and is movably connected with the frame head tube; the backrest folding mechanism is provided with a backrest and a pole component which is movably connected with the frame tail tube; the rear form folding mechanism is provided with a rear fork fixing tube and is movably connected to the rear fork fixing tube. The folding bicycle and the folding method thereof disclosed by the invention have the beneficial effects that the structure is simple, and the convenience in use is realized; forward or backward rotation of the handlebar body, folding of the backrest and folding of a rear form are realized, the technical problem that a bicycle for children cannot be folded in the prior art is solved, and the storage space is reduced.