An in-line polarization extinction ratio (PER) monitor that generates a value of an optical signal's PER from a single measurement, without requiring the optical transmission signal path of the system to be directly coupled into a separate measurement device. The polarization extinction ratio may be defined as: 10 log(PEx/PEy), where PEx is the power of the optical signal propagating along the “x axis” and PEy is the power propagating along the orthogonal “y axis” (with the z-axis defined as a longitudinal optical axis of the system and the x-y plane orthogonal to this direction of propagation). The PER monitor comprises a section of optical fiber (preferably birefringent or with induced birefringency), with a pair of gratings formed along the fiber and oriented to out-couple orthogonal components of the propagating signal. Photodetectors are used to convert the scattered light into electrical signal equivalents and then processed to yield the PER value. By properly aligning the axes of the monitor and the optical system, the two measurements are sufficient to provide a one-shot, real-time calculation of the PER of the optical signal propagating through the system.