A dynamic first-order polarization mode dispersion (PMD) compensator based on garnet and yttrium vanadate crystal has been proposed and implemented. Consisting of a differential group delay (DGD) generator and a Faraday rotator (FR), this PMD compensator has only two degrees of freedom. Feedback control and compensation algorithm are both very simple. Experimental results reveal the compensator behaviors to be excellent for PMD compensation in 40-Gb/s optical time domain multiplexing (OTDM) system.