Abstract: In this paper, an orthogonal vector-based polarization-dependent loss (PDL) elimination method is proposed, which can effectively solve the problem of demodulation performance deterioration caused by crosstalk of orthogonal polarization signals in dual-polarized wireless communications. In this method, the polarization signal is processed by orthogonal vector at the transmitter and receiver side respectively to eliminate the inter-polarization interference. In addition, the impairment caused by non-ideal channel is further eliminated by using the estimated channel parameters at the transmitter. In this manner, without changing the noise power, the interference-free reception of orthogonal polarization signal is realized, and the BER performance is improved effectively. Theoretical analysis and simulation results show that when using polarization state modulation technology to modulate signals, the proposed method has better BER performance than the pre-compensation method and zero-forcing matrix method, and can reach the theoretical value under Gaussian channel. Thus, the PDL effect is effectively eliminated.