An optical demodulator and accompanying method(s) that demodulates a DQPSK signal employing a single optical delay interferometer comprising a free-space Michelson interferometer having two optical paths, connected to a 1.times.2 coupler. Positioned within an arm of the Michelson interferometer is a phase shifter that produces a phase difference of .pi./2 between the two paths. The resulting demodulator is compact, reliable, and may be constructed to be substantially immune from undesirable thermal sensitivities.