We have experimentally demonstrated the efficient creation of highly entangled bipartite continuous variable polarization states. Exploiting an optimized scheme for the production of squeezing using the Kerr non-linearity of a glass fibre we generated polarization squeezed pulses with a mean classical excitation in Ŝ3. Polarization entanglement was generated by interfering two independent polarization squeezed fields on a symmetric beam splitter. The resultant beams exhibit strong quantum noise correlations in the dark Ŝ1-Ŝ2 polarization plane. To verify entanglement generation, we characterized the quantum correlations of the system for two different sets of conjugate Stokes parameters. The quantum correlations along the squeezed and the anti-squeezed Stokes parameters were observed to be -4.1 ±0.3 and -2.6 ±0.3 dB below the shot noise level, respectively. The degree of correlations was found to depend critically on the beam-splitting ratio of the entangling beam splitter. Carrying out measurements on a different set of conjugate Stokes parameters, correlations of -3.6 ±0.3 and -3.4 ±0.3 dB have been observed. This result is more robust against asymmetries in the entangling beam splitter, even in the presence of excess noise. © IOP Publishing Ltd and Deutsche Physikalische Gesellschaft.