We demonstrate a novel 40-Gb/s transmission system over a 10×101-km standard single mode fiber (SSMF) loop. This system features polarization multiplexed quadrature phase shift keying (PolMux-QPSK), lowvoltage modulation of 2-V peak-to-peak signal amplitude, and home-made 90? optical hybrid with singleended digital coherent detection. Any power amplifers before the modulator and balanced detectors are not used. In the case of low-voltage modulation, coherent detection is much less sensitive to modulator bias offset than delay interferometer-based demodulation.