In order to acquire temperature-insensitive optical filter which also has good channel isolation, a novel Sagnac loop cascaded . lter based on highly birefringent photonic crystal fiber (HiBi-PCF) is proposed. Theoretical analysis and numerical simulation are conducted to the two-order cascaded Sagnac loop filter with Jones matrix theory. When the length ratio of the two segments of HiBi-PCFs in cascaded filter is 2:1, the full-width at half-maximum (FWHM) of transmission spectrum is 0.4 nm, which is only 1/3 of that of the single Sagnac loop filter, so as to effectively improve the filter channel isolation degree. The results show that this kind of filter possesses a good filtering effect and is also insensitive to the temperature change, which can be applied to 50 GHz dense wavelength division multiplexing (DWDM) system.