A method for dynamically controlling heat dissipation of an AC LED driving circuit has steps of connecting multiple voltage-controlled transistors and a current detection unit in series to a power loop having an LED unit, connecting a resistive element between each adjacent two of the voltage-controlled transistors to constitute multiple stages of power distribution units, detecting a voltage and a current of the power loop and calculating a consumed power value, and switching to one of the stages of power distribution units with a power range in which the current power value falls. As the higher stage of power distribution unit has more resistive elements for current to flow therethrough, it can share the power of the single-chip voltage-controlled transistor when the LED unit having higher power is used, thereby avoiding overheated condition and malfunction of the voltage-controlled transistor.