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Two important aspects of internal calibration of polarimetric synthetic aperture radar (SAR) are discussed, i.e., individual transmit/receive module (TRM) calibration and system gain calibration. The system has a general structure utilizing a phased array antenna composed of dual-channel TRMs. TRM gain and phase calibration is carried out using orthogonal phase coding (OPC). The signal of the individual TRM is phase-encoded according to a set of orthogonal codes to be separated from the composite calibration signal. OPC uses 1 bit of a digital phase-shifter for encoding, without the need for additional encoding hardware. Performance of the method is examined. Calibration results are developed both theoretically and through simulation in case of TRM amplifier or phase-shifter failure. Zero-padding is used to eliminate calibration error of the first TRM. A crosstalk model is proposed to investigate the effect of imperfect isolation between the two polarization channels of each TRM, and a way to reduce this error is also given. At last, system path gain variation is measured utilizing the internal calibration loop. The OPC method has an accuracy of 0.2 dB for gain and better than 2deg for phase, with 10-dB signal-to-noise ratio and perfect isolation between the two polarization channels. The error due to imperfect isolation is usually small and can be ignored. The simple way to detect TRM malfunction is verified through simulation, and it is also in accordance with TerraSAR-X in-orbit calibration outcomes. The proposed OPC method is shown to be an effective way of internally calibrating TRMs of a phased array antenna.