This paper focuses on the TDD LTE system where the uplink and downlink shares the same frequency carrier. The brief introduction and the motivation of designing TDD LTE system are provided in the first part of this paper; then the detailed comparisons between TDD LTE and FDD LTE, mainly on physical layer, are presented. Then we analyze the difference and indicate the challenges of the LTE TDD physical layer with some possible solutions. The performance benchmarks for different solutions are also given in this part. Finally the paper concludes by summarizing the benefits and difficulties of TDD LTE system, with suggestions for further optimization.