: The two-phase MIMO NC (network coding) scheme can be used to boost the throughput in a two-way relay channel in which nodes are equipped with multiple antennas. The obvious strategy is for the relay node to extract the individual packets from the two end nodes and mix the two packets to form a network-coded packet. In this paper, we propose a new scheme called MIMO PNC (physical network coding), in which the relay extracts the summation and difference of the two end packets and then converts them to the network-coded form. MIMO PNC is a natural combination of the single-antenna PNC scheme and the linear MIMO detection scheme. The advantages of MIMO PNC are many. First, it removes the stringent carrier-phase requirement in single-antenna PNC. Second, it is linear in complexity with respect to the constellation size and the number of simultaneous data streams in MIMO. Simulation shows that MIMO PNC outperforms the straightforward MIMO NC significantly under random Rayleigh fading chann...