A model for polarized light propagating in the biological tissue was proposed and the propagating of polarized light was simulated with the model. The distribution of polarization in biological tissue and birefringence model of biological tissue were reconstructed with different input polarized light. The relationship between Degree of Polarization (DOP) and order of scatters shows that depolarization of polarized light propagating in tissue weakens the interference between two arms of interferometer in PS-OCT and brings down image quality. Analysis of application of Stokes vector, Muller matrix in fiber-based PS-OCT system shows that Muller matrix is not affected by polarization of input light. Compared with Stokes vector, Muller matrix is more suitable for studying fiber-based PS-OCT.