Numerical distributed transfer function method is applied to planar optical waveguides. By using scalar variational principle, the numerical transfer function equations are derived. Then problems are solved in the form of state space. Infinite elements are introduced to reduce the amount of computation. This is more reasonable in the near cut-off case. Application and numerical examples are given and compared with several other methods which show the advantage of this method on planar optical waveguides with either step or graded refractive index profile.