The invention discloses a method for updating heavy hydrocarbon to produce light oil and a plasma hydrogenation reactor for the method. The plasma hydrogenation reactor comprises a cavity and a preheater, wherein the cavity is surrounded by low-voltage electrode reaction tubes, the top and the bottom of the cavity are respectively sealed by an upper insulating flange and a lower insulating flange, the inside of the cavity is provided with high-voltage electrodes extending in the axial direction of the cavity, the low-voltage electrode reaction tubes and the high-voltage electrodes are respectively connected with a plasma power supply, the inside of the cavity, corresponding to the reaction areas of the high-voltage electrodes, is provided with insulating medium, the outside of the cavity is sheathed with a heating furnace, the preheater is communicated with the cavity by a material inlet, and the inside of the cavity, corresponding to a gas product outlet, is provided with a gas and liquid separating area. Compared with the traditional catalytic hydrogenation, the amount of free radicals of active hydrogen is increased in a doubling way by the plasma hydrogenation, the generation amount and generation speed of the free radicals of the active hydrogen can be adjusted through adjusting the discharging parameters, and the generation amount and generation speed of the free radicals of heavy oil can be adjusted through adjusting the temperature, so as to realize a matching purpose.