A passive optical network communication system transmits an optical time-division multiplexed signal from a central office through a passive optical coupler to a number of subscribers, and transmits optical encoded signals from the subscribers through the passive optical coupler to the central office. Optical encoded signals from different subscribers are separated by a decoding process performed at the central office. All operations can be synchronized with a clock signal which is generated at the central office and recovered from the optical time-division multiplexed signal by the subscribers' equipment. The communication range can be extended inexpensively by using a single high-power light source at the central office while using relatively low-power light sources at the subscribers' equipment.