Abstract: The capacity issue of Physical-layer Network Coding (PNC) is investigated. According to the Max-Min Mutual Information (MMMI) criterion, a new opportunistic relaying scheme is proposed based on Amplify-and-Forward (AF). Then, the outage probability expressions are derived for the new proposed scheme as well as the schemes of ideal PNC and traditional direct transmission in frequency-nonselective Rayleigh fading channels. By the analysis, it is found that the system outage performance can be measured by one-way channel in some conditions, which are determined by the node transmission powers. Simulation results show that the outage performance is improved significantly when MMMI strategy is used.