A Faraday Isolator is an optical component typically used to prevent unwanted feedback into an optical oscillator (A laser cavity is a good example.) The operation of the device depends on the Faraday effect which is used in the main component, the Faraday Rotator.

An isolator is made of three parts, an input polarizer (for this discussion we will assume it's polarized up and down), a Faraday Rotator, and an output polarizer (we will assume this one is 45° to the right.)

Light traveling in the forward direction becomes polarised light | polarized] (vertically in our case) by the input polarizer. The Faraday Rotator will rotate the polarization 45°. The output polarizer will allow all the light to escape and continue.

Light traveling in the backward direction becomes polarised light | polarized] (45° to the right in our case) by the output polarizer. The Faraday Rotator will rotate the polarization 45° more to the right so that it is horizontally polarised light | polarized] (it is insensitive to direction) and the input polarizer, which is vertically aligned, will block the light.

Faraday isolators are different from 1/4 wave plate based isolators because it can provide non-reciprocal rotation while maintaining linear polarization which allows higher isolation to be achieved.

Obviously the most important optical element in a Faraday isolator is the Faraday rotator. The characteristics that one looks for in a Faraday rotator optic, include a high verdet constant, low absorption coefficient, low non-linear refractive index and high damage threshold. Also, to prevent self-focusing and other thermal related effects, the optic should be as short as possible. The two most commonly used materials for the 700-1100nm range are terbium doped borosillicate glass and terbium gallium garnet crystal (TGG).