In this work, we study the physical layer solutions for 10-gigabit-capable passive optical networks (PONs), particularly for an optical link terminal (OLT) including a 10-Gbit/s electroabsorption modulated laser (EML) and a 2.5-Gbit/s burst mode receiver (BM-Rx) in a novel bidirectional optical subassembly (BOSA). As unique features, a bidirectional mini-flat package and a 9-pin TO package are developed for a 10-gigabit-capable PON OLT BOSA composed of a 1,577-nm EML and a 1,270-nm avalanche photodiode BM-Rx, including a single-chip burst mode integrated circuit that is integrated with a transimpedance and limiting amplifier. In the developed prototype, the 10-Gbit/s transmitter and 2.5-Gbit/s receiver characteristics are evaluated and compared with the physical media dependent (PMD) specifications in ITU-T G.987.2 for XG-PON1. By conducting the 10-Gbit/s downstream and 2.5-Gbit/s upstream transmission experiments, we verify that the developed 10-gigabitcapable PON PMD prototype can operate for extended network coverage of up to a 40-km fiber reach.