We introduce adaptive coding and modulation (ACM) to direct-detection passive optical networks (PONs) operating beyond 10 Gb/s per wavelength to allow each user to transmit at the highest possible bit rate and improve network reliability. Current fixed-rate PONs must allocate significant power margin to ensure reliable long-term operation over channels that vary over time and between users. Introducing adaptive-rate transceivers with ACM is a promising low-cost solution to increasing the overall capacity of optical access networks. The proposed ACM scheme uses two-, three-, or four-level pulse-amplitude modulation (2-, 3-, or 4-PAM) at a fixed symbol rate with direct detection and low-density parity check (LDPC) codes derived from a mother code by shortening and puncturing, decoded using fixed-initialization normalized min-sum decoding. The scheme supports received optical powers spanning a 10-dB range at bit rates of 20–54 Gb/s. In a PON with 64 users transmitting at a symbol rate of 30 Gbaud and a maximum transmission distance of 25 km, the ACM scheme demonstrates more than 3 dB improvement in overall optical power budget. For a fixed margin, ACM can increase throughput up to 60% compared to fixed-rate transmission, from 25 Gb/s to 39.7 Gb/s, or from 37.5 Gb/s to over 50 Gb/s, depending on the received optical power.