Systems and methods of polarization demultiplexing are disclosed. One such method receives a transmitted polarization-multiplexed optical signal The polarization-multiplexed has multiple polarizations, each of which represents an independent data stream. The method converts the polarization-multiplexed optical signal to a corresponding polarization-multiplexed electrical signal. The method determines an inverse transformation matrix that meets an independent component analysis (ICA) criterion. The method applies the inverse transformation matrix to the polarization-multiplexed electrical signal, which produces a polarization-demultiplexed electrical signal. The method phase estimates the polarization-demultiplexed electrical signal to recover the data stream.