Abstract: A quantum key distribution system includes an optical transmitter that generates a multiplexed QKD data and polarization reference signal, wherein a relative polarization of a QKD data signal component and a polarization reference signal component of the multiplexed QKD data is known. A quantum channel propagates the multiplexed QKD data and polarization reference signal. An optical receiver includes a demultiplexer that demultiplexes the multiplexed QKD data and the polarization reference signal. The optical receiver also includes a detector that detects an intensity of the demultiplexed polarization reference signal. In addition, the optical receiver includes a polarization transformer that transforms a polarization of the demultiplexed QKD data signal in response to the detected intensity so that a polarization axis of the QKD data signal is substantially the same as a polarization axis of the QKD data signal generated by the optical transmitter.