A service switching system and a service switching method, where the system includes at least two service processing subracks and at least one optical cross-connect subrack. Each service processing subrack is connected to each optical cross-connect subrack using an optical fiber. Each service processing subrack is configured to perform service switching for an externally inputted service data electrical signal, and then convert it into an optical signal, and send to one or more optical cross-connect subracks, or vice versa. Each optical cross-connect subrack is configured to receive a service data optical signal from one or more service processing subracks and perform optical cross-connection for the service data optical signal, and then output the service data optical signal to the one or more service processing subracks, which reduce interconnection costs of the service switching system.