The invention discloses an isothermal compressed air energy storage system and a high-efficiency power generation method, and belongs to the field of large-capacity energy storage. The top end of a liquid piston in the energy storage system is connected to a low pressure gas pipeline and a high pressure gas pipeline through F2 and F3 valves separately; the low pressure gas pipeline is connected toa compressor; one end of the high pressure gas pipeline is connected to the compressor and the other end of the high pressure gas pipeline is connected to a gas storage unit through F1; an only waterinlet below the liquid piston is connected to a liquid outlet on the secondary side of a hydraulic transmission unit through F4, the other liquid outlet on the secondary side of the hydraulic transmission unit is connected to a four-way, and the other three outlets of the four-way are separately connected with a low temperature pool, the top end of a solar heat supplement machine and a hot waterstorage tank; and the bottom end of the solar heat supplement machine is connected to the hot water storage tank through a hydraulic driving device, and the top end of the solar heat supplement machine is connected to a hot water supply port through F8. The isothermal compressed air energy storage system and the high-efficiency power generation method utilize a temperature prediction and liquid temperature control algorithm, and configure a liquid spray device to realize isothermal compression or expansion of the system.