The effectS of linear optical birefringence in Bi-substituted yttrium iron garnetYIG thin film optical waveguide on TE-TM mode conversion, Faraday rotation, isolationratio and insertion losses of the waveguide isolator are investigated. Double-layered Bi substituted YIG films have been grown for single mode magneto-optic waveguides. Thecharacteristicsand elimination of shape, stress-induced and growth-induced linearbirefringences are analysed.