We discussed a nonlinear optical loop mirror (NOLM) device using a symmetrical coupler, highly twisted fiber, and a quarter-wave (QW) retarder introducing the polarization asymmetry in the loop. We have shown high contrast operation, flexibility of characteristics, and stability in time. We analyze theoretically and study experimentally the transmission behavior for different input polarization considering as well different output polarizations. The nonlinear characteristics depend on the QW retarder plate angle, but also on the polarization state at the NOLM input. Experiments were carry out with the NOLM consisted of a 500-m length SMF-28 fiber with twist rate of 7 turns/meter. Experiments show a good agreement with our theoretical approach. Appropriate choice of the input and output polarizations allows very high contrast, at least higher than 5000. Experiments show flexibility and stability of characteristics. Adjustment of the QW retarder and input polarization allows tuning the critical power over a wide range.