A portable electronic device includes a first body and a second body. The second body includes a processing unit, and a first touch panel, a second touch panel, a keyboard and at least one detecting module electrically connected to the processing unit, respectively. The keyboard is slidably disposed above the second touch panel, and the detecting module is adapted to detect a position of the keyboard. When the keyboard is located at a first position, the keyboard module covers the second touch panel, and the detecting module transmits a first signal to the processing unit so that the first touch panel is turned on. When the keyboard is located at a second position, the keyboard exposes the second touch panel, and the detecting module transmits a second signal to the processing unit so that the first touch panel is turned off. A touch panel controlling method of the portable electronic device is further provided.