The process of photon splitting becomes allowed in the presence of strong m
agnetic field. We calculate the influence of magnetized plasma on the photo
n splitting absorption coefficient. We calculate the refraction coefficient
s and polarization vectors with the inclusion of the vacuum terms at an arb
itrary value of the magnetic field, and then find photon splitting matrix e
lement taking into account the terms that vanish in vacuum but may be nonze
ro in the presence of plasma. We find the photon splitting rate in plasma w
ith the density typical for a neutron star star atmosphere and identify a r
egion of the parameter space where the plasma effects are important.