Polarization-insensitive in-line all-optical wavelength conversion (AOWC) of a single-channel 320-Gb/s RZ-DQPSK data signal in the middle of a 320-km transmission span is reported. The technique is based on a Ti:PPLN waveguide in a polarization diversity scheme. The conversion efficiency of the signal was 21 dB, which includes 9.2 dB of passive losses in the whole Ti:PPLN subsystem. Error-free performance for the in-line wavelength converted signal after 320-km transmission was successfully achieved. Index Terms-In-line all optical wavelength conversion, optical time-division multiplexing (OTDM), periodically poled lithium niobate (PPLN), polarization insensitive.