This paper presents a monitoring system for tree-structured passive optical access networks. The emitted light of a superluminescent LED is utilized as the monitoring source. The light signal that propagates along the fiber to the customer site is then reflected by a uniform or phase-shifted fiber Bragg grating (FBG), which is employed near the end of the customer site. The wavelength optimization concept was demonstrated, where one center wavelength or Bragg wavelength is shared by two types of monitoring FBGs. Each FBG represents the distinct location of the optical network unit (ONU) to be monitored. This technique improves the number of monitored ONUs twofold, since a single Bragg wavelength can be utilized to monitor two independent customers. The results were analyzed using a digital signal processing board that displays the reflection spectra of the FBGs. After identifying the faulty branch, an optical time domain reflectometer can be activated for fault localization. The system is capable of monitoring up to 128 customers while maintaining the bit error rate at 10^−9. This real-time, centralized monitoring system demonstrates a low-power and cost efficient monitoring system with low bandwidth requirements.