A compact optical isolator includes a polarizer, a Faraday rotator, and an analyzer that are arranged in series. A magnet is also included to provide a magnetic field to the Faraday rotator. The outer edges of the polarizer, Faraday rotator, and analyzer are preferably parallel to each other and to the optical path of the incoming light beam so that the optical aperture through the optical isolator is maximized. In addition, each of the polarizer, the Faraday rotator, and the analyzer have at least one facet in the optical path of the light beam that is tilted from perpendicular with respect to the light beam such that reflections are avoided. The analyzer may have a wedge shape such that one surface mates level with an optical fiber and the opposing surface is tilted to prevent reflections. Alternatively, a wedge-shaped block may be located between the analyzer and the optical fiber.