A modem testing system is provided for testing interoperability of plural items of customer premises equipment (CPEs) (10) and plural central offices (COs) (60). The modem testing system includes a line simulator (50), a switch (40), and a controller (30). The line simulator is connected to the CPEs and COs for simulating various types of lines and noise statuses. The switch is connected to the line simulator, the CPEs, and the COs for switching connections between the CPEs and the COs. The controller is connected to the line simulator, the switch, the CPEs, and the COs for controlling the switch to set up communications between the CPEs and the COs according to a mapping list, and controlling the line simulator to simulate various types of lines and noises statuses. An exemplary modem testing method is also provided.