The effect of polarization sensitivity on the intensity and the resolution of the diffracted beams from a birefringent photorefractive hologram is investigated. In addition, an optical switching technique based on the sensitivity is demonstrated. The method is capable of implementing a large number of 2 x 2 switching channels with only four holograms. The on/off ratio of the switches can easily reach 100:1. This switching methodology is applicable to either synchronous or asynchronous interconnection with a variety of photorefractive materials.