The Ethernet passive optical network (EPON), which is one of the PON technologies for realizing FTTx (Fiber-To-The-Curb/Home/Office), is a low-cost and high-speed solution to the bottleneck problem that occurs between a backbone network and end users. The EPON is compatible with existing customer devices that are equipped with an Ethernet card. To effectively control frame transmission from optical network units (ONUs) to an optical line termination (OLT), the EPON can use a multi-point control protocol (MPCP) with control functions in addition to the media access control (MAC) protocol function. In this paper, we propose a two-phase cycle dynamic bandwidth allocation (TCDBA) algorithm to increase the channel utilization on the uplink by allowing frame transmissions during computation periods, and combine the TCDBA algorithm with the queue management schemes performed within each ONU, in order to effectively support differentiated services. Additionally, we perform simulations to validate the effectiveness of the proposed algorithm. The results show that the proposed TCDBA algorithm improves the maximum throughput, average transmission delay, and average volume of frames discarded, compared with the existing algorithms. Furthermore, the proposed TCDBA algorithm is able to support differentiated quality of services (QoS).