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A new polarimetric interferometer has been developed on the basis of the phase difference between transverse electric (TE)/sub 0/ and transverse magnetic (TM)/sub 0/ modes in a composite optical waveguide (OWG). The composite OWG consists of a single-mode potassium ion-exchanged planar waveguide overlaid with a high-index thin film that has two tapered ends and supports only the TE/sub 0/ mode. Applying tapered velocity coupling theory, we found that the TE/sub 0/ and TM/sub 0/ modes coexisting in the potassium ion-exchanged layer were separated in the thin film region of the composite OWG: the TE/sub 0/ mode was coupled into the thin film while the TM/sub 0/ mode was confined in the potassium ion-exchanged layer. Interference occurs between TE- and TM-polarized output components when a single output beam is passed through a 45/spl deg/-polarized analyzer. The phase difference /spl phi/ between both orthogonal output components is very sensitive to the superstrate index n/sub c/ in the thin film region. Our experimental results indicate that a slight change of /spl Delta/n/sub c/=3.71/spl times/10/sup -6/ results in the phase-difference variation of /spl Delta//spl phi/=1/spl deg/ for a 5-mm-long TiO/sub 2//K/sup +/ composite OWG with a 34-nm-thick TiO/sub 2/ film. Such a simple polarimetric interferometer can be applied to chemical or biological sensors by modifying the upper film surface of the composite OWG with a chemically or biologically active substance.