Abstract: An optically coupled rotary encoder that is capable of measuring and encoding the angle of rotation of a rotating or stationary object. A polarizer rotates synchronously with the rotatable object and inputs broadband or single frequency unpolarized light. The polarizer outputs and directs polarized light towards a plurality of fixed analyzers and light detectors. Each fixed analyzer outputs and directs further polarized light towards one of the light detectors. Each light detector outputs an electrical signal to a phase processor based upon one attribute of the further polarized light. The phase processor outputs a phase angle with high resolution (>10 bit) with high accuracy and frequency (5 Mhz). The system and method can operate in harsh environments having high temperatures, dirt and debris and is not susceptible to EMI/RFI.