The invention relates to a low-nitrogen combustion device and an application method thereof. The device comprises an outer shell, a gas distribution chamber, a plurality of gas mixing pipes, an anti-backfire cavity, a combustion chamber, an ignition needle, a heat exchange tube bank, a first water inlet pipe, a first water outlet pipe, a second water inlet pipe and a second water outlet pipe, wherein the anti-backfire cavity is arranged on the rear side of the gas distribution chamber; the plurality of gas mixing pipes are transversely and uniformly distributed in the anti-backfire cavity; theignition needle is arranged in the combustion chamber and is closely attached to the wall of the anti-backfire cavity; the heat exchange tube bank is arranged on the rear side of the anti-backfire cavity, and the distance between the heat exchange tube bank and the anti-backfire cavity is 40-80 mm; and the anti-backfire cavity is connected with the first water inlet pipe and the first water outlet pipe, and the heat exchange tube bank is connected with the second water inlet pipe and the second water outlet pipe. The low-nitrogen combustion device comprehensively utilizes a water cooling technology, a premixing technology and an anti-backfire technology, effectively reduces the emission of nitrogen oxides by reducing the temperature of a flame surface, solves the problems of high emissionof nitrogen oxides and carbon monoxide or premixed backfire and the like of a full premixed condensing boiler in the current market, and can be widely suitable for a commercial or domestic distributed heating system.