The effect of chromatic dispersion (CD) on the degree of polarization (DOP) feedback signal in polarization mode dispersion (PMD) compensation is analyzed. Signal suffering from PMD and CD shows a larger DOP than that in the only PMD case, and their DOP deviations relate not only to the polarization splitting ratio or relative delay between the signal′s two polarization components, but to the bit error rate and the CD values; But the system performance collapses after a firstly slight improvement with the increasing of CD, as the experiments in 2.5 Gb/s NRZ modulated system and the simulations in 10 Gb/s system show. Therefore DOP can no longer reflect the effect of PMD on system performance in presence of CD. The less the energy difference between two cross-polarization components, or the larger the differential group delay, the greater the signal DOP deviates, and the deviations increase rapidly with the system ratio and CO increase. Modifications to the DOP distortion in PMD compensation are proposed finally, which indicate that CD must be compensated before PMD in actual systems when the effects of PMD and CD simultaneously exist.