The invention relates to a reactive power compensation device and a compensation method, in which an RS485 interface networking communication technology is applied to a control system between a reactive power controller and a combination switch of a switching capacitor. The reactive power compensation device comprises the reactive power controller, the combination switch of the switching capacitor and a power capacitor, wherein a signal output end of the reactive power controller is connected with a signal input end of the combination switch of the switching capacitor respectively through a networking communication module and an RS486 interface, and a signal output end of the combination switch of the switching capacitor is connected with a signal input end of the power capacitor respectively. The reactive power compensation device and the compensation method have the advantages that firstly, the compensation accuracy is improved; secondly, 32-path output is easily realized through one data line of the reactive power controller with the RS485 interface output, for example, by utilizing a specially-made 485 chip, 128 or 256 nodes can be achieved, and 400 nodes can be supported to the maximum degree, therefore, the compensation accuracy of a large-capacity compensation device is solved; thirdly, the compensation reliability is improved; fourthly, the compensation connection is more convenient; fifthly, intelligent compensation is realized; and sixthly, the compensation device has low cost.