In this paper, we have proposed a hybrid optical wavelength demultiplexer and power combiner for a hybrid time- and wavelength-division multiplexing (TWDM) passive optical network (PON), i.e., a single passive optical device that functions as a 1×N wavelength demultiplexer for distributing the downstream signal in multiple wavelengths from the optical line terminal (OLT) to the N optical network units (ONUs), and simultaneously as an N×1 power combiner for collecting the upstream signal in the same wavelength from the N ONUs to the OLT. Through a design example of a 32 channel hybrid optical wavelength demultiplexer and power combiner on the silicon-on-insulator platform, our numerical simulation result shows that the insertion loss and adjacent channel crosstalk of the downstream wavelength demultiplexer are as low as 4.6 and 16.3 dB, respectively, while the insertion loss and channel non-uniformity of the upstream power combiner can reach 3.5 and 2.1 dB, respectively. The proposed structure can readily be extended to other material platforms such as the silica-based planar lightwave circuit. Its fabrication process is fully compatible with standard clean-room technologies such as photo-lithography and etching, without any complicated and/or costly approach involved.