Disclosed is a banknote processing device and a banknote processing method. The banknote processing device includes an identification mechanism, an in-out mechanism, a loading box, a circulating box, a main passage, an auxiliary passage, an in-out passage, a loading passage, and a circulating passage. The auxiliary passage is of annular shape, and both ends of the main passage are each connected to the auxiliary passage. A banknote is allowed to move in a one-way direction along a preset direction in the auxiliary passage. The identification mechanism is disposed in the main passage. The in-out passage is connected between the main passage and the in-out mechanism. A first end of the circulating passage is connected to the main passage. A second end of the circulating passage is connected to the circulating box. A first end of the loading passage is connected to the auxiliary passage, and a second end of the loading passage is connected to the loading passage.