The invention provides an indoor circulating water cultivation system for pelochelys bibroni fry. The system comprises a fry cultivation device, a water cleaning device and a water circulating pipe, wherein the fry cultivation device comprises a fry cultivation pool and a center pipe; a water layer and a sand layer are arranged in the fry cultivation; the center pipe is vertical in the fry cultivation pool; a separation net area is arranged on the wall of the center pipe; in addition, a drain pipe is vertically arranged in the center pipe; the water cleaning device comprises a water cleaning barrel and a separation pipe; the separation pipe is arranged in the water cleaning barrel in a hanging manner; a filtering layer is arranged between the water cleaning barrel and the separation pipe; a blow-off pipe is arranged at the lower part of the water cleaning barrel; a bottom blow-off structure is arranged above a blow-off inlet of the blow-off pipe; the water circulating pipe comprises a sewage outlet pipe and a clean water feeding pipe which are respectively used for discharging sewage in the fry cultivation pool and supplementing filtered sewage into the fry cultivation pool. In addition, the invention provides an indoor circulating water cultivation method for the pelochelys bibroni fry. The water used in the system is circulating filtrating water, the quality of water is ensured, the cultivation survival rate of the pelochelys bibroni is high, and the cultivation management and scientific research observation are facilitated.