We propose semiconductor optical isolators based on nonreciprocal polarization rotation. The optical isolation is based on the magnetic field dependence of the polarization rotation, which is produced by the nonreciprocal phase difference in Fe-InGaAlAs/InP semiconductor active waveguide optical isolators. We characterized their alpha parameter and demonstrated an extinction ratio of 18.3 dB in 0.85-mm-long waveguide devices. This is a new approach to realize monolithically integrable semiconductor optical isolators with large optical isolation and short (<1 mm) device length. (C) 2010 The Japan Society of Applied Physics