Provided is a method of monitoring link performance and diagnosing an active link state without interrupting traffic in an Ethernet passive optical network (EPON) while the link is in the active state. The method of monitoring link performance and diagnosing an active link state without interrupting data flow to logic links which are in active states in the EPON, includes: a) allowing an operator of the EPON to select a link performance monitoring function or a link active state diagnosing function; b-1) if the link performance monitoring function is selected, setting a monitoring cycle timer and periodically transmitting a performance information request frame from a local node to a remote node; b-2) if the remote node receives the performance information request frame, collecting corresponding link performance information and transmitting a response frame from the remote node to the local node in a format which is predetermined in accordance with a corresponding frame format; b-3) if the local node receives the response frame from the remote node, analyzing the performance information of the response frame and determining whether the link performance has deteriorated or if a failure has occurred in the local node; b-4) if the deterioration of the link function or the degree of the failure reaches a predetermined threshold, reporting to an upper layer that a failure has occurred.