An EPON which is going on standardization in IEEE 802.3ah, is tree topology consists of a OLT and multiple ONU using passive optical components, so this network is susceptible to variable security threats - eavesdropping, masquerading, denial of service and so on. In this paper, we design a security protocol supporting authentication and confidentiality services in MAC layer in order to prevent these security threats and to guarantee secure data exchange The designed security protocol introduce public-key based authentication and key management protocols for efficient key management, and choose Rijndael algorithm, which is recent standard of AES, to provide the confidentiality of EPON Proposed authentication and key management protocols perform authentication and public-key exchange at a time, and are secure protocols using derived common cipher key by exchanging public random number To implement the designed security protocol, we propose the procedures of authentication and public-key exchange, session key update, key recovery. This proposed protocol is verified using unknown session key, forward secrecy, unknown key-share, key-compromise impersonation