In this paper, we developed a simulator which can generate the polarization waves for the indoor wireless communications based on three dimensional ray tracing technique and verified the simulation results comparing with the measured data in indoor wireless propagation environments. Using the developed simulator, we analyzed the channel characteristic and polarization diversity reception characteristic for the vertical, horizontal and circularly polarized waves. From the analysis results, in the case of using circularly polarized wave it can be clearly seen that the multipath fading is markedly reduced compared to the vertical and horizontal polarized waves due to the reception characteristic of removing the odd time reflected waves