A dynamic bandwidth allocation method with a punishment mechanism applicable in an Ethernet passive optical network (EPON) is provided. The method utilizes GATE message, report message format, and different data types of a multipoint control protocol (MPCP) to order various queues to make the queues have priority and transmit them sequentially in transmission. Meanwhile, the method can fairly allocate the bandwidth and reduce the delay time of queue according to an appropriately designed punishment mechanism and bandwidth allocation principle, so as to fulfill the requirements of Quality of Service (QoS).