The invention discloses a two-wire cascade application system for power supply and data transmission at the same time and an implementation method thereof. The two-wire cascade application system comprises a controller, a cascade chip and an LED lamp, the controller is connected with the cascade chip, the cascade chip is connected with the LED lamp, a voltage clamping module, a power supply module, a data storage module, a PWM constant-current output drive circuit, an R end, a G end, a B end, a W end, a VCC / DATA end and a GND / DATA end are arranged in the cascade chip, and a data sampling calibration module, a power line sampling transmission data module, a instruction setting chip initial state module, a module for judging whether the E-fuse address is the same as the chip initial addressor not and an E-fuse module which are connected in sequence are also arranged in the cascade chip. For the cascade application, the accuracy of the cascade application is ensured, the production costis saved, the production process is simplified, the production automation is realized, the display effect is optimized and the like.