Abstract The dynamics of a nonlinear optical loop mirror (NOLM) with feedback using a high birefringence fiber in the loop are investigated. The effect of rotating input polarization angle on the output power and polarization angle is numerically examined, illustrating the sensitivity of the NOLM with feedback to the input’s polarization state, as well as the polarization chaos present with sufficient input powers. The inclusion of a polarization-dependant loss in one or both arms of the coupler is also shown to change the output dynamical behaviour of the system.