Errors will be introduced in the fabrication process of InP arrayed waveguide grating, consequently affect the performance. To control errors best, and improve the performance of the device, the systematic errors and random errors of InP-based arrayed waveguide grating was analyzed by adopting transmission function method. It is come to a conclusion from the simulation result of systematic errors that: the deviation of effective index of the deep-ridge waveguide nc changes every 0.000 1, the central wavelength shifts 0.05 nm. The length difference of adjacent arrayed waveguides ΔL changes every 0.01 μm, the central wavelength shifts 0.44 nm. They will consequently cause the shift of whole optical spectrum, but the channel spacing and crosstalk will not be changed. The deviation of the radius of Rowland circle will not change the central wavelength but change the channel spacing. R increases every 50 μm, the channel spacing decreases 0.03 nm. According to the simulation result of random errors: the refractive index of core layer, the cladding layer and the substrate layer of the waveguide, the waveguide width and the thickness of core layer′s random fluctuation can deep affect the crosstalk. According to the analysis above, central wavelength and channel spacing can be tuned by changing different parameters, thereby, improving the optical performance of the arrayed waveguide grating.