The invention provides a frequency assignment and interference coordination method for a power LTE (Line Termination Equipment) network based on service isolation. The method comprises the following steps: base stations use information transmitted by upstream channels between the base stations and terminals to measure link signal-to-noise ratios and obtain service rate requirement information; total service rate requirements of different service regions are subjected to statistics, and service proportions of the different service regions are calculated; the base stations prorate authorized frequency sets by the service proportions according to the service proportions of the different service regions and the authorized frequency sets owned by the base stations, a production control region frequency subset and a management information region frequency subset are formed; frequency subset assignment information is interacted among the base stations, and the frequency subsets are further adjusted; the base stations carry out frequency assignments on service terminals in a coverage area according to the adjusted frequency subsets. The frequency assignment and interference coordination method disclosed by the invention realizes service bearing isolation of the different service regions and has higher safety, compared with a frequency soft multiplexing method, the frequency assignment of an edge user is more reasonable and flexible.