The invention discloses a system and method for monitoring automatic cable winding and releasing of an ROV (Remotely Operated Vehicle) umbilical cable winch, and relates to the field of marine engineering systems and equipment. The system comprises a water surface mother ship, a remotely operated vehicle (ROV), a control console, an ROV umbilical cable winch, an umbilical cable, a sound source, optical fiber hydrophones and an acoustic beacon, and is characterized in that the control console, the ROV umbilical cable winch and the sound source are arranged on the water surface mother ship, the sound source faces towards the underwater, the control console is connected with the ROV umbilical cable winch and the sound source, the ROV umbilical cable winch comprises a winding drum, one end of the umbilical cable is wound on the winding drum of the ROV umbilical cable winch and is connected with the control console, the other end of the umbilical cable is connected with the ROV, the optical fiber hydrophones are arranged on the umbilical cable at intervals, and the acoustic beacon is arranged on the ROV. The system can perform online monitoring on the states such as the cable shape and the cable length of the umbilical cable underwater, can realize three-dimensional simulation display for the underwater position states of the umbilical cable and the ROV through comprehensive analysis and processing and improves the manipulation intuition and the system security.