According to the ray tracing method of the vector field and the geometrical relation of the optical path, the relations between normalized incident height, refractive index and divergence angle have been deduced. With the aim of minimizing the divergence angle, the optimum design parameters of cat′s eye retroreflector have been obtained, and optical design of cat′s retroreflector have been performed by ZEMAX. The polarization ray tracing and polarization properties analysis of cat′s eye retroreflector were carried out based on the three-dimensional Jones matrix method, and the retardance and diattenuation of cat′s eye retroreflector in the exit pupil of cat′s eye retroreflector and the influences on the output polarization state were analyed. The calculation results had shown that the maximum values of retardance and diattenuation were 0.3° and 0.027, which have no effect on the output polarization state. The FRED software was used to simulate the situation of cat′s eye retroreflector with input horizontal, 45° linear and circular, elliptical polarization states, to verify the correctness of previous theoretical analysis. The simulation results have indicated that the output polarization state is the same as that of the input polarization state through cat′s eye retroreflector, that is to say, cat′s eye retroreflector has the polarization state-preserving effect, which is significant for the expand application for cat′s eye retroreflector.