The invention discloses a transformer substation station domain protection system based on an EPON and a method thereof and belongs to the passive optical network technology field. The system comprises a transformer substation station domain protection host (2) and a passive optical network. All the protection acquisition terminals which correspond to each other with intervals in a transformer substation are connected to the transformer substation station domain protection host through the passive optical network. A whole station protection measurement and control function is realized. The passive optical network ensures entire network synchronization and high speed data communication. Each terminal realizes on-site protection and the station domain protection host realizes cross-interval protection, and the two kinds of protection are combined. An in-station protection communication network is simplified, and reliability, rapidity and sensitivity of entire station protection are increased.