Iodine-doped polyvinyl alcohol (IDPVA) film has been widely used as a plastic polarizer due to its great linear dichroism. We found that the anisotropic character of the plastic polarizer can be permanently damaged upon exposure of high intensity femtosecond laser pulses. This process is a two-photon-induced chemical reaction and denominated as two-photon-induced isotropy (TPII). The TPII effect can form a high polarization contrast on the base of the original IDPVA films. With this property, polarization-sensitive diffractive optical elements are fabricated in IDPVA films. The low cost of the IDPVA film and the high polarization contrast of TPII make it a promising new candidate for femtosecond laser fabrication of polarization-selective optical elements. © 2020 Optical Society of America.