We study the birefringence and polarization coupling in the index-guiding photonic crystal fibers (PCFs) with squeezed hexagonal crystal lattice. The sign of form birefringence in such photonic crystal fibers can be changed as the wavelength changes, which is reported for the first time to our knowledge. A PCF-based polarization splitter with squeezed hexagonal lattice is proposed to achieve excellent extinction ratio and a simpler structure than those reported previously.