Abstract: The present invention provides a multi-functional separator which may be used as a demultiplexer or as a multiplexer in wavelength division multiplexed optical communication systems. The preferred embodiment of the multi-functional separator includes a first polarization beam splitter, a non-reciprocal rotator; a reciprocal rotator, a second polarization beam splitter, and a non-linear interferometer. Each of the polarizing input and polarizing output ports includes an optical fiber, a collimator, a birefringent walk-off plate and a non-reciprocal optical rotator. The multi-functional separator is easily aligned by adjusting the positions of each of the polarizing input and output port. Further embodiments of the present invention provide additional optical isolation, optical circulation, optical comb filtering and/or two-stage channel separation capabilities.