A media access control (MAC) layer address translation system is included in a fiber to the home (FTTH) system having a central office that interfaces a packet data network with a passive optical network (PON). The (MAC) layer address translation system includes a home network unit (HNU), a host system, and a MAC address table. The HNU is coupled to the PON and has an associated base MAC layer address and an associated secondary MAC layer address that identify the HNU within the PON. The host system is coupled in a network to the HNU and has an associated host MAC layer address that identifies the host system within the network. The MAC address table is stored in a memory device, and associates the host MAC layer address with the secondary MAC layer address. Upon receiving an outgoing transmission from the host system that includes the host MAC layer address, the HNU accesses the MAC address table to determine the secondary MAC layer address that is associated with the host MAC layer address and modifies the outgoing transmission to replace the host MAC layer address with the secondary MAC layer address.