The invention relates to a failure diagnostic device for a passive optical network (PON) link, which comprises the following parts: an optical signal processing subsystem, a PON subsystem, a processor (CPU) subsystem, a user interface (I/O) subsystem, a business interface subsystem, a clock subsystem and a power subsystem. The primary function of the device comprises the physical layer testing, link layer testing, business layer testing of the PON interface and the display, record and preservation of the testing results. The device of the invention has distinct characteristics and advantages that: firstly, the device can make overall monitoring to the link situation of the PON system and all kinds of key parameters and can clearly position every failure of the PON system; secondly, the device is a handheld device with simple and flexible operation, which is suitable for the installation of the PON network equipments, project acceptance and maintenance applications; thirdly, a modularized structure can provide different testing functions by adding the VoIP business modules and IPTV business modules.