There are a terminal device capable of link layer encryption and decryption and a data process method thereof, and the terminal device includes a link layer processing module including a control module, a data frame encryption module, a data frame decryption module, a key management module, an algorithm module, a transmission port and a reception port; and the control module is connected with the transmission port through the data frame encryption module, the reception port is connected with the control module through the data frame decryption module, the control module is connected with the key management module, the data frame encryption module is connected with the data frame decryption module through the key management module, and the data frame encryption module is connected with the data frame decryption module through the algorithm module.