One embodiment provides a system for power saving in an Ethernet Passive Optic Network (EPON). The system includes an optical line terminal (OLT), an optical network unit (ONU), a traffic-detection module configured to detect status of traffic to and from the ONU, and a power-management module configured to place the ONU in sleep mode based on the detected traffic status. The ONU includes an optical transceiver that includes an optical transmitter configured to transmit optical signals to the OLT and an optical receiver configured to receive optical signals from the OLT.