A novel 3R regeneration scheme based on polarization switching in a semiconductor optical amplifier-assisted fiber Sagnac interferometer is presented and experimentally demonstrated at 10 Gb/s. The scheme operates error-tree retaining the input wavelength or as regenerative wavelength converter, and requires extremely low switching power of 2. dBm to operate. Investigation of the retiming ability of the regenerator is also reported to demonstrate full optical retiming from a signal with up to 21-ps timing jitter achieved with a penalty of 1 dB.