There are provided an unbalanced Mach-Zehnder interferometer and a modulator based thereupon. The interferometer comprises a loop comprising a plurality of cascaded segments of polarization-maintaining fibers, into which an input signal is split such that two light portions of the split signal propagate concurrently in mutually opposite directions along the loop; and a first optical arrangement between a first and a second segment of the loop for rearranging the axes of propagation of the two light portions such that, on at least a one segment, the two light portions propagate along mutually orthogonal polarization axes of the polarization-maintaining fiber. The light portions are then recombined to mutually interfere. Birefringence of the segment(s) where the light portions propagate on mutually orthogonal polarization axes then provides a differential path length of the interferometer. An unbalanced Mach-Zehnder modulator is obtained by inserting a phase modulator within the loop.