Abstract: With the development of industrial Internet, passive optical network (PON) has attracted the common attention of industry and academia. In order to cope with the different characteristics of diversified industrial Internet scenarios, industrial PON needs to meet the requirements of ultra-high speed, ultra-large connection and low cost. Physical layer modulation format, multiplexing mode, transmission scheme and digital signal processing algorithm have always been the research hotspot in this field. Firstly, this paper introduces the basic concept of PON, reviews the standardization process of PON, and focuses on the physical layer transmission scheme and key technologies of PON, which include the research progress of intensity modulation technology, multi-dimensional multiplexing technology and digital equalization technology. Then, the digital coherent detection system with polarization multiplexing intensity modulation suitable for industrial PON transmission is proposed. The 50 Gbit/s signals modulated with four-level pulse amplitude modulation (PAM 4) and on-off keying (OOK) are transmitted respectively on the simulation platform. Performance assessments of BTB transmission and 20 km fiber transmission are studied to prove the superiority of this proposed scheme. Finally, the development trend of the physical layer of industrial PON is prospected.