The invention relates to a lithium niobate based tunable optical filter and application thereof. According to the lithium niobate based tunable optical filter, the characteristic of a lithium niobate crystal is skillfully utilized, and the refractive index is changed based on the electro-optical effect, so that the optical path difference between adjacent waveguides can be dynamically adjusted and the tunable range of the device is changed; and besides, based on the electro-optical effect, appropriate voltage is applied to an electrode to change the refractive index of the crystal so as to change an optical path, that is, the phase difference of the light having different wavelengths in adjacent waveguides is changed, and after the light is subjected to waveguide output through an output channel, demultiplexing to different wavelengths of the light is finished, and the tunability of an arrayed waveguide grating is expanded.