A method of producing an elliptic core type polarization-maintaining optical fiber comprises the steps of providing a glass rod comprising a cladding glass layer around the periphery of a core glass layer, the cladding glass layer having a softening point higher than the softening point of the core glass layer, removing two side surface portions of the glass rod by machining along the axial direction of the glass rod to form a machined rod noncircular in cross section, outside depositing fine silica glass particles on the periphery of the machined rod, followed by sintering to provide a support glass layer having a softening point higher than the softening point of the cladding glass layer, and drawing the thus obtained glass rod body as an optical fiber preform. Since the portion for constituting the core of the optical fiber is formed by machining, the core is permitted to have a high ellipticity. An optical fiber with the desired size and birefringence index is obtained by regulating the conditions of production.