The invention discloses an optical transmission module with digital adjustment and method thereof. The module includes a laser (21), a laser driver (22), an automatic power adjustment circuit (23), an automatic temperature adjustment circuit (24), a digital adjustment circuit (25) and a memory (26). The digital adjustment circuit, consisted of a digital-to-analog converter or a digital adjustment potentiometer, receives a digital adjustment signal and outputs, respectively, a extinction ratio adjustment signal and a cross point adjustment signal to the laser driver, an optical power adjustment signal to the automatic power adjustment circuit and an optical wavelength adjustment signal to the automatic temperature adjustment circuit. The memory stores data, using for on-line adjustment of the optical transmission module, at least including parameters of said optical transmission module and said laser emitting optical power parameters, to be reported upward. During adjustment, look up the parameter table of optical transmission modules, according to an expected output optical power, obtain corresponding DAC channel data and write it to the digital adjustment circuit in which adjustment signals of corresponding parameters are produced; and according to A/D conversion result detected by the laser against light, look up the table for transmitted power to be reported upward, to obtain a transmitted power value for reporting upward.