By using a loop configuration formed by a polarization beam splitter, we experimentally demonstrate that the existing wavelength-division multiplexing (WDM) sources in C-band can be wavelength converted to the S-band with low polarization sensitivity and low crosstalk. Using a fiber parametric amplifier as a band converter, we achieve experimentally 4.7-dB conversion efficiency over 30-nm conversion bandwidth in 315 m of fiber. Compared to the conventional straight fiber wavelength conversion scheme, a more than 2-dB improvement in polarization sensitivity is measured. In addition to the polarization insensitivity, channel crosstalk is measured to be <-27 dB in 315 m of high nonlinearity fiber. In a detailed experimental study, the pattern of crosstalk in longer fiber lengths and the coupling between the polarization sensitivity and crosstalk are measured. For example, with a 430-m fiber length, we measure the degradation in polarization sensitivity to be /spl sim/4 dB for 12-dB increased signal power. The experimental results are also confirmed by theoretical calculations. Moreover, in a 32 channels systems simulation, the signal-to-noise ratio (SNR) of the converted signals after 800-km propagation is calculated to be only 0.8-dB degraded compared to using laser diodes with the same initial SNR values. Furthermore, we calculate the effect of pump noise and show that the relative intensity noise of the pump is transferred to the converted signals with an additional 8-dB/Hz degradation.