A highly birefringent index-guiding photonic crystal fiber (PCF) with flattened dispersion and low confinement loss is proposed by introducing two small air holes with the same diameter in the core area. The fundamental mode field, birefringence, confinement loss, effective mode area and dispersion characteristic of the fibers are studied by the full-vector finite element method (FEM). Simulation results show that a high birefringence with the order of 10⁻³ and a low confinement loss of 0.001 dB/km are obtained at 1550 nm. Furthermore, flattened chromatic dispersion from 1450 nm to 1590 nm is obtained.