The invention discloses a passive window structure with an auxiliary frame and an installation method thereof. The installation method comprises the following steps: (1) installing the auxiliary frame on a wall at the outer side of a window opening, embedding in an outer insulating layer, and enabling four sides of the auxiliary frame to be respectively consistent with the window opening in verticality and levelness; (2) after the auxiliary frame is installed, sticking a waterproof and breathable membrane on the outer surface of the auxiliary frame, sticking a waterproof and gas-isolated membrane on the front of the auxiliary frame, and installing positioning lines on the outside top surface and two side surfaces of the auxiliary frame; and (3) connecting the auxiliary frame with the passive window to finish installation. After the auxiliary frame of the passive window is adopted, the passive window disclosed by the invention is simpler in structure, can completely meet the energy-saving requirement, is more reasonable in design, is energy-saving and environment-friendly, is reduced in cost, convenient in installation and standardized in installation, thoroughly solves the connection problem of passive window installation and external insulation construction, and is increased in installation yield.