The invention discloses a system and a method for realizing low-cost local area network service transmission for a wavelength division multiplexing optical access network. According to the system, an optical line terminal (OLT) is connected with a remote node RN through a feeder line optical fiber to form a tree-shaped network; the remote node RN is connected with an optical network unit ONU through a distributed optical fiber; the optical line terminal comprises N optical signal transmitters, N distributed feedback lasers DFB, N optical signal receivers, three 1*N array waveguide gratings AWG, a phase modulator PM, three optical circulators, a coarse wavelength division multiplexer, a waveband block WB, an optical isolator, N*N array waveguide gratings AWG and N optical network units ONU; each optical network unit ONU comprises two coarse wavelength division multiplexers, an optical circulator, an optical divider, three optical signal receivers, a reflective semiconductor optical amplifier RSOA, an electro absorption modulator EAM and a wideband light source BLS. Through the structural design of the RN end array waveguide gratings and the ONU end wideband light source, high-speed transmission of low-cost local area network service can be effectively realized in the wavelength division multiplexing optical access network (WDM-OAN).