The invention relates to the technical field of communication, and discloses an embedded PON terminal device TR069 protocol interworking simulation system. The system comprises a transcribing module, a recording module, a TCP server and a playback module, wherein the transcribing module is used for monitoring protocol interaction between a TR069 module and an ACS management platform and transcribing an interaction message during the interaction of the TR069 module and the ACS management platform; the recording module is used for recording the interaction message transcribed by the transcribing module; the TCP server is used for simulating the ACS and establishing a communication connection with the TR069 module; and the playback module is used for reading the interaction message recorded by the recording module, and meanwhile the TCP server and the TR069 module perform simulation playback of the interaction message based on the read interaction message. The invention further provides an embedded PON terminal device TR069 protocol interworking simulation method. By adoption of the embedded PON terminal device TR069 protocol interworking simulation system and method disclosed by the invention, the positioning and searching efficiency of communication problems between the TR069 module and the ACS management platform can be effectively improved.