The tunneling dynamics and periodic modulation effect of a two-component Bose-Einstein condensate in an one-dimensional optical lattice are investigated. By using the two-mode approximation, we study the influence of the interaction between two-component BECs on the tunnelling dynamics of the system numerically. The dynamic behavior of the system is investigated by adding a periodic modulation on the interaction between two-component atoms. We get the region for the onset of the tunneling, unstability and the self-trapping of the system with the changing modulation amplitude and frequency. We find that for the intermediate- and the low- frequency modulations, the dynamic behaviors of the system are dramatically different.