An analysis of the polarization properties of volume phase gratings is given. The analysis is based on the two-wave coupled-wave theory. The formulation presented here differs from the well-known theory of Kogelnik by taking into account the form birefringence of the grating. Analytical expressions for the dependencies of the Bragg angles, the grating strength, the dephasing between the readout and the diffracted wave, and the diffraction efficiency on the state of polarization are given for gratings of the transmissive and the reflective types. The cases of a cosine and a rectangular refractive index profile are discussed in detail. Finally, experimental results are given to support the theory.