The polarization modulation ranging method uses the polarization-modulated light to transmit the measured distance phase information and the polarization response of the retroreflector as its cooperative target affects the system performance. In order to study this response, a complex signal description method of polarization-modulated light is presented. In the global coordinate system, the complex signal representation of reflected polarization-modulated light is obtained with the polarization transfer parameters. Under normal incidence, the polarization responses of uncoated solid (BK7) and hollow (Au film) retroreflectors to polarization-modulated light are analyzed, the polarization-preservation performances of three kinds of common metal coatings to the polarization-modulated light are compared, and the influence of attitude angle of the retroreflector on the polarization-preservation properties is analyzed. The calculation results show that the polarization-preservation performance of Ag film is better than those of Au film and Al film. In the global coordinate system, the amplitude ratio of polarization-modulated light is significantly affected by the deflection angle, and the phase delay is significantly affected by the pitching angle. These results can provide a theoretical guidance for the optimal design of a polarization modulation ranging system.