A server IP address assignment system which can automatically assign IP address for servers includes a data center management system (DCMS) server, a dynamic host configuration protocol (DHCP) server, a plurality of switches, and a plurality of servers. The DCMS server obtains a location table of the servers and the switches based upon initial data center construction details, and assigns an IP address to each of the servers, the location table with these assignments is then transmitted to the DHCP server. The server transmits a DHCP packet to the switch, and the switch adds an Option82 message into the DHCP packet and transmits an added DHCP packet to the DHCP server. The DHCP server analyzes the Option82 message of the DHCP packet to obtain the IP address and assigns the IP address to the server. A server IP address assignment method is also provided.