Summary: We fabricated a 1.55-µm polarization insensitive Michelson interferometric wavelength converter (MI-WC). The MI-WC consists of a two-channel spot-size converter integrated semiconductor optical amplifier (SS-SOA) on a planar lightwave circuit (PLC) platform. Clear eye opening and no power penalty in the back-to-back condition were obtained at 10 Gb/s modulation. We also confirmed the polarization insensitive operation on the input signal. Moreover, for an application of the MI-WC to DWDM networks, we demonstrated the selective wavelength conversion of 2.5 G/s optical packets from Fabry-Perot laser diode (FP-LD) light to four ITU-T grid wavelengths. We confirmed the good feasibility of this technique for use in DWDM networks. The wavelength conversion we describe here is indispensable for future all-optical networks, in which optical signal sources without wavelength control will be used at user-end terminals.