The invention provides a wireless communication system based on an E waveband and a signal processing method thereof, which are used for realizing frequency division duplex wireless communication based on the E waveband. The wireless communication system based on the E waveband comprises a communication processing subsystem, a millimeter wave front-end subsystem and a dual-polarized antenna, wherein the communication processing subsystem is used for receiving a baseband signal and a control signal by means of a baseband signal processing module, carrying out specific scrambling, encoding, interleaving, modulation and digital pre-distortion compensation processing on the baseband signal according to the control signal, and then transmitting the processed baseband signal to a radio frequencysignal processing module; the processed baseband signal is converted into an E-band signal through up-conversion and then transmitted to the millimeter wave front-end subsystem, and the millimeter wave front-end subsystem amplifies the E-band signal through using a power amplification module, and then transmits the amplified E-band signal to the dual-polarized antenna to be transmitted; and the dual-polarized antenna is further used for receiving the E-band signal and transmitting the E-band signal to the millimeter wave front-end subsystem, then the E-band signal is transmitted to the communication processing subsystem by the millimeter wave front-end subsystem and is converted into the baseband signal through down-conversion, and the baseband signal is transmitted to the baseband signalprocessing module for output.