A system for controlling luminance of an LED (Light Emitting Diode) lamp includes an MCU (3), an LED circuit (4), an LED lamp (5), and a display (6). The MCU controls the LED circuit to adjust a luminance value of the LED lamp. The MCU includes: a CPU (31) for monitoring a status of the associated display, generating a corresponding PWM (Pulse-Width Modulation) pulse when the system operates in different working phases, and transmitting the corresponding PWM pulse to the LED circuit via a PWM pin (32); a timer (33) for recording a duration of a user operating a control button (61); and a memory (34) for storing control programs. The LED circuit sets a luminance value of the LED lamp according to the PWM pulses. A related method is also provided.