A packet add/drop multiplexer and a data transmission method of a packet add/drop multiplexer are provided. The packet add/drop multiplexer includes: a line interface unit including a first line interface and a second line interface; a scheduling unit, configured to schedule a data frame of an input transporting side and send a data frame of an output transporting side through the second line interface; a branch unit, configured to encapsulate received data to a third Transmission Container (T-CONT) data packet and send the third T-CONT data packet to the scheduling unit, or decapsulate a first T-CONT data packet sent by the scheduling unit to recover data. In the packet add/drop multiplexer and the data transmission method of the packet add/drop multiplexer, a T-CONT data packet of a transporting side is used as a packet add/drop multiplexing structure of a packet scheduling entity, the data packet has a simple structure and a capability of self-synchronization, and the logic is simple when the data packet is processed.