An apparatus and method of building an Internet Protocol (IP)-based video service system in a Hybrid Fiber Coax (HFC) network is provided. An apparatus for building an IP-based video service providing system, the apparatus including: an IP decapsulation unit to delete a header in a video signal in a packet form transmitted by an IP-based video server, and to subsequently transmit the video signal to a headend; the headend to encapsulate the video signal received by the IP decapsulation unit into a Media Access Control (MAC) header, and to transmit the encapsulated video signal in the packet form; and an IP protocol encapsulation unit to perform IP encapsulation of the video signal received from the headend.