A multi-level data encryption and decryption system and a method thereof are provided. The method includes dividing a data into a plurality of sub-data blocks corresponding to a plurality of user levels. The method also includes generating an encryption key for each level according to a level generation key and a time key of the level and encrypting the sub-data block of each level by using the encryption key of the level, wherein the level generation key and the time key of a lower level are generated based on the same of an upper level, the time key is generated according to a time generation key and a time seed, and the time seed is periodically updated according to different encryption periods. Thereby, the number of keys to be managed by a user is reduced while the read rights of different users are managed with forward and backward data security.