Aspects of a method and system for reducing transceiver power via a variable signal constellation are provided. In this regard, an Ethernet PHY device may receive one or more signals indicative of a current state of an Ethernet link to which the PHY device is coupled and/or indicative of resources, such as power, available to the PHY device. Accordingly, a number of points comprising a signal constellation utilized to communicate data via the Ethernet link may vary based on the one or more signals. A current state of the link may comprise a bit error rate, a packet error rate, and/or utilization, in terms of bandwidth for example, of the link. Aspects of the invention may enable controlling, at least in part, power consumption of the PHY device may altering the number of points comprising the signal constellation.