System and method for testing jitter tolerance by using a built-in jitter modulation circuit is disclosed. An embodiment comprises a jitter modulation circuit, a transmitter, a receiver and a data comparison unit. The jitter modulation circuit includes a plurality of data latches, a phase-select block and a multi-phase clock generator. The multi-phase clock generator is capable of generating a plurality of signals having different phase shifts wherein one signal having a phase shift from the system clock signal is selected by the phase-select block. The selected signal alters the data by injecting jitter through a plurality of data latches. The jitter-contaminated data is transmitted to a data comparison unit through a transmitter and a receiver. The on-chip test circuit compares the jitter-contaminated data with the original data and calculates the bit error rate so as to determine whether the jitter tolerance of this semiconductor device satisfies the specification.