A polarization conversion system suited for LCD or LCoS-based projection applications is disclosed. The present invention polarization conversion system encompasses a light pipe with a rectangular light tunnel therein defined by four side reflection mirrors. A front reflection with an aperture thereon is mounted on an entrance face of the light pipe. A first polarization beam splitter is mounted on an exit face of the light pipe. A retardation plate, which is perpendicular to the exit face, is situated atop the first polarization beam splitter. A reflection mirror is situated atop the retardation plate. A second polarization beam splitter is mounted under the first polarization beam splitter and is opposite to the retardation plate.