Polarization state in retro-reflective arrays may be controlled throughout the optical path of a retro-reflective retro-imaging setup to enhance system efficiency. A polarization beam splitter layer and a retarder layer placed in front of the retro-reflector array may be oriented such that polarized light is used as source, source input light is efficiently reflected at the polarization beam splitter layer toward the retro-reflective layer, and polarization is converted to circular upon first pass through retarder layer. The polarization may also be oriented at or near 45° with respect to input polarization state, light may be retro-reflected and reconverged at the retro-reflective layer, and converted to linear polarization state. The light may then be rotated about 90° with respect to input linear state, and/or passed through the polarization beam splitter layer upon second pass to form the reconvergent image.