The invention discloses an embedded family anti-theft alarm system and a working method thereof. The system, based on an electric rolling shutter window, comprises a power supply module, a control processing module, and a pyroelectric infrared sensor, a reflective photoelectric sensor, an alarm circuit, a communication module, a key circuit and an indicator circuit connected with the control processing module. The working method comprises the following steps: the system is initialized, and the control processing module is connected with the communication module; the pyroelectric infrared sensor and the reflective photoelectric sensor transmit sensed signals to the control processing module; the control processing module carries out judgment according to the received sensing signals, and when the reflective photoelectric sensor is firstly triggered and the pyroelectric infrared sensor is then triggered, alarm signals are generated; and a buzzer in the alarm circuit sounds, an indicatorlamp in the indicator circuit begins to flicker, the communication module sends an alarm short message to a mobile phone of a user, and the user is prompted. The embedded family anti-theft alarm system and the working method thereof have the advantages that the real-time monitoring is good, a remote alarm can be given, the reliability is high, and the safety of residential housing can be improved.