Abstract: In this paper we consider a scheme for asymmetric data transmission in two-way relay channel (TWRC) with physical layer network coding (PLNC). In practical communication, the transmission rate is always asymmetric because of the asymmetric channel quality, transmission power and rate requirement.We propose a scheme named subset coding, which combines channel coding and physical layer network coding with modulation to realize the asymmetric rate transmission in two-way relay channel. By using this scheme, the channel code which is adopted by the weaker channel is the subset of the one which is adopted by the stronger channel. In addition, the scheme takes advantage of the linearity of channel coding so that the relay node can decode directly the superposition signal into the XOR bits to obtain the information, which reduces the complication of the communication system. The simulation results show that the proposed scheme not only improves the information transmission rate, but also guarantees the reliability of the system.