Abstract: The virtual power plant (VPP) can participate in electricity markets to provide power and frequency regulation auxiliary services for the system by aggregating resources such as distributed generation, adjustable load and energy storage. Its core objective is to maximize the benefits by optimizing the allocation of internal resources across the two markets. To address the insufficient market competitiveness of VPPs caused by the lack of specific and accurate volume bidding methods, this paper proposes a VPP bidding strategy considering the dynamic variation of regulation capacity under a multi-market environment, as well as a joint clearing mechanism of energy-frequency regulation markets incorporating VPPs. Firstly, the adjustable capacity boundary of the VPP is characterized according to the scheduling characteristics of internal resources. A segmented joint bidding strategy based on adjustable capacity partition interval is then proposed to enable full scheduling of internal resources for market participation. Secondly, in view of the overlap between the two markets, a joint clearing mechanism of energy-frequency regulation markets with VPP integrated is constructed to improve the allocation efficiency of flexible resources. Finally, case studies are carried out to verify the proposed bidding strategy and clearing mechanism. The results show that compared with the single-segment bidding strategy based on a fixed power range, the total power purchase cost of the system and VPP is reduced by 0.75% and 53.93%, respectively. It is verified that the proposed bidding strategy and clearing mechanism can maximize the social benefits while improving the VPP's own benefits.