The present invention discloses a dynamic password authentication method and a system thereof. The method comprises: a server receives first information sent from the client, generates second information according to the first information, sets every transmission bit in the second information to be in corresponding brightness status or color status to obtain a third information and sends it to a client; the client transforms the third information into impulse optical signal and outputs it; a dynamic password device transforms the impulse optical signal into intermediate information, extracts part or all of it and transforms it into display information; the dynamic password device receives trigger information, generates a first dynamic password; the server generates a second dynamic password or a set of second dynamic passwords and verifies whether the first dynamic password is legitimate by it. Security of authentication is improved by the present invention.