The invention discloses light rail support keyway processing equipment and a processing method thereof. The equipment is mainly composed of a pedestal, a horizontal sliding table assembly, which is arranged on the pedestal and moves along the X-axis in a straight line, a longitudinal sliding table assembly, which is arranged on the pedestal and moves along the Y-axis in a straight line, and a PLC control table arranged on the pedestal; wherein the horizontal sliding table assembly comprises a horizontal slide rail, a power head member, and a transmission mechanism I, the power head member comprises a power head body, a milling cutter, a transmission mechanism II, and a transmission mechanism III, and the longitudinal slide table assembly comprises a longitudinal slide rail, a sliding table, a transmission mechanism IV, a revolving workbench, and a work tool clamp. The processing method mainly comprises the steps of clamping, tool setting, milling, steering, position changing, milling, and detection. Compared to the prior art, the equipment has the advantages of small size, little occupied space, and high automation degree; moreover, the work strength for workers and the required operators are both reduced, thus the light rail support keyway processing efficiency is improved, the cost is saved, and the equipment is suitable for massive production on a plurality of machines at the same time.