A method for compensating a baseline wander of a transmission signal and related circuit are provided. The transmission signal includes a plurality of first pulses and a plurality of second pulses for representing digital data coded in the transmission signal. The method includes generating an accumulation result according to a number of the first pulses and a number of the second pulses for estimating the baseline wander of the transmission signal, and compensating the baseline wander of the transmission line according to the accumulation result.