A method and system of controlling an engine for vehicle interior heating is provided. The method includes performing a first engine control when the engine is not in an engine-on state for vehicle driving, to perform heating control for interior heating at a predetermined range of a reference coolant temperature. Additionally, the method includes performing a second engine control when the engine is in an engine-on state for vehicle driving, to prolong an engine-on time for vehicle driving by setting a minimum value of the range of the reference coolant temperature to a lower value and setting a maximum value of the range of the reference coolant temperature to a higher value and to determine a point of time of engine-off operation based on a real-time lock up time and an average lock up time of an engine clutch for vehicle driving.