Fiber quarter-wave plates and magneto-optical fibers are important components that greatly affect the sensitivity of fiber-optic current sensors. A Tb:YAG crystal-derived silica fiber (TYDSF) was fabricated using a CO2 laser-heating drawing technique. The linear birefringence of TYDSF was measured as 6.661×10-6 by a microscope birefringence measurement instrument. A fiber quarter-wave plate was fabricated by TYDSF at 1310 nm, which produced circularly polarized light with a polarization extinction ratio of 0.34 dB. Additionally, the linear birefringence of TYDSF was decreased by 22% by annealing at 750°C for 7 h, and the Verdet constants of annealed TYDSF were measured to be 9.83, 6.67, and 3.48rad/(T·m) at 808, 980, and 1310 nm, respectively.