This paper shows an efficient adaptation of a polarization diversity optical front-end, commonly used in high-speed fiber-optic communications, in a coherent Doppler lidar (CDL). The adopted architecture can be employed in a modified transceiver design for an all-fiber micropulsed coherent Doppler wind lidar where the performance limits of such systems are pushed beyond the conventionally available wind CDLs. As a result, either a longer measurement range, crucial in clear-air environments with low concentration of aerosols, or a shorter integration time (resulting in a faster scanning) can be achieved. Alternatively, in certain aerosol loading conditions where the presence of nonspherical aerosols is considerable, the system can be reconfigured on the fly to analyze the cross polarization of the backscatter optical signal. The result is the capability to analyze the nature of aerosol particles for the detected range of interest. Due to full utilization of the backscatter signal, i.e., detection of co-polarization and cross polarization components, the signal-to-noise-ratio (SNR) as well as detection range is improved in this configuration. Moreover, the system is capable of providing a more reliable estimation of the aerosol backscatter coefficient when compared with the contemporary CDLs. This system employs robust and compact all-fiber subsystems, which are cost effective and widely available as off-the-shelf components.