We propose and experimentally demonstrate an integrated passive optical network monitoring system for fault detection and localization. Fault detection technology is based on the recognition of reflection spectrum generated by each single fiber Bragg grating, which can support large-capacity user fiber fault monitoring. Fault localization method uses two different total received powers measured by an optical power meter to solve the established equation, and it shows a good accuracy compared with the OTDR measurement results. Fault detection and localization are carried out separately but share the same transmitter module. The introduction of the additional module ensures that the troubleshooting does not affect other normal user data communication. We also investigate the dynamic range requirements of the fault detection technology and the measurement error of the fault localization method. The calculation results show the required dynamic range for the recognition device can be maintained within a small range and the use of high-accuracy optical power meter can reduce the measurement error. The proposed monitoring system can simultaneously provide a large-capacity fault detection technology and high-accuracy fault localization method in a cost-sensitive passive optical network market.