Abstract: Provided is a method and device for viscosity-reducing and upgrading of low-grade heavy oil. The method comprises: (a) performing visbreaking reaction on low-grade heavy oil raw material and controlling the content of toluene insolubles in the produced oil; (b) mixing the produced oil in step (a) with hydrogen in a gas-liquid mixer to obtain a hydrogen-oil mixture in liquid state, or mixing the produced oil in step (a) with hydrogen to obtain hydrogen-oil mixture in gas-liquid state; in the presence of a hydrogenation catalyst, performing hydrogenation reaction on the hydrogen-oil mixture in liquid state or the hydrogen-oil mixture in gas-liquid state in the reactor, and obtaining a viscosity-reduced and upgraded oil after the reaction. It is viscosity-reducing and upgrading method by combining thermal visbreaking and fixed-bed hydrogenation, which can solve the problems of high viscosity, high density and poor stability of low-grade heavy oil products in the prior art.