System and method for monitoring two-wire communication in a network environment

An example method is provided and includes receiving, from a host device, a first signal over a two-wire bus to an address on the two-wire bus corresponding to a small form factor (XFP) module, the host device being located outside the XFP module, the two-wire bus coupling the host device with a first controller inside the XFP module and a second controller inside the XFP module that share the address such that the first controller and the second controller receive the first signal, and blocking a second signal from the second controller to the host device using digital isolation buffers. A third signal from the first controller to the host device over the two-wire bus is not blocked. In specific embodiments, the first controller includes a XFP compliant controller and the second controller includes an optical controller.