A method for processing an optical network signal in a passive optical network, comprising: at an optical line terminal generating a first polarization component and a second polarization component according to an optical source signal, wherein the first polarization component and the second polarization are perpendicular to each other; modulating downlink data onto the first polarization component; and inputting the first polarization component on which the downlink data is modulated to a first polarization port of a polarization beam combiner, inputting the second polarization component on which no downlink data is modulated to a second polarization port of the polarization beam combiner, combining the two input polarization components into a third optical signal, and sending the third optical signal to an optical network unit; receiving, by the polarization beam combiner, a fourth optical signal sent by the optical network unit, wherein the fourth optical signal is obtained by the optical network unit by rotating each polarization component of the third optical signal received at the optical network unit by 90 degrees and performing uplink data modulation onto two polarization components of the third optical signal received at the optical network unit; outputting one polarization component of the fourth optical signal at the first polarization port and outputting another polarization component of the fourth optical signal at the second polarization port; and demodulating uplink data from the polarization component output from the first polarization port and isolating the polarization component output from the second polarization port. at an optical line terminal generating a first polarization component and a second polarization component according to an optical source signal, wherein the first polarization component and the second polarization are perpendicular to each other; modulating downlink data onto the first polarization component; and inputting the first polarization component on which the downlink data is modulated to a first polarization port of a polarization beam combiner, inputting the second polarization component on which no downlink data is modulated to a second polarization port of the polarization beam combiner, combining the two input polarization components into a third optical signal, and sending the third optical signal to an optical network unit; receiving, by the polarization beam combiner, a fourth optical signal sent by the optical network unit, wherein the fourth optical signal is obtained by the optical network unit by rotating each polarization component of the third optical signal received at the optical network unit by 90 degrees and performing uplink data modulation onto two polarization components of the third optical signal received at the optical network unit; outputting one polarization component of the fourth optical signal at the first polarization port and outputting another polarization component of the fourth optical signal at the second polarization port; and demodulating uplink data from the polarization component output from the first polarization port and isolating the polarization component output from the second polarization port.