The Manakov model is the simplest multicomponent model of nonlinear wave theory: It describes elementary stable soliton propagation and multisoliton solutions, and it applies to nonlinear optics, hydrodynamics, and Bose-Einstein condensates. It is also of fundamental interest as an asymptotic model in the context of the widely used wavelength-division-multiplexed optical fiber transmission systems. However, although its physical relevance was confirmed by the experimental observation of Manakov (vector) solitons in a planar waveguide in 1996, there have in fact been no quantitative experiments confirming its validity for nonlinear dynamics other than soliton formation. Here, we report experiments in optical fiber that provide evidence of passband and baseband polarization modulation instabilities in a defocusing Manakov system. In the spontaneous regime, we also reveal a unique saturation effect as the pump power increases. We anticipate that such observations may impact the application of this minimal model to describe and understand more complicated phenomena in nature, such as the formation of extreme waves in multicomponent systems.