A reset circuit and a reset method of a portable terminal are provided. The reset circuit of a portable terminal includes an input unit for generating a certain input signal for reset according to a user input, a reset unit for generating a manual reset input signal according to an input of the certain input signal, for performing a control operation to cut-off power to be supplied to a Power Management IC (PMIC) using a signal generated during an operation maintenance time interval of the portable terminal and the manual reset input signal, and for performing a control operation to resupply the power to the PMIC according to an input signal from the input unit or completion of a preset timer, and a power supply unit for supplying the power.