In this paper, the first- and second-order polarization mode dispersion (PMD) with the amount of 132.994-ps differential group-delay (DGD) and maximum 476.129-ps/nm second-order PMD can be compensated by a two-stages PMD compensator at a 40-Gb/s optical fiber communication system. The first stage has one free degree that is used for first order and high orders PMD compensations by rotating the state of polarization. The second-stage is used for remainder PMD compensations. After compensation, the average DGD and the maximum second-order PMD are reduced to 345.310 fs and 3.102 ps/nm, respectively.