A system and method for phase-readout/control and active stabilization on arbitrary interferometric phase in the optical interferometer platform is disclosed. The method makes use of a bi-colored polarization-multiplexed reference laser scheme. The disclosed scheme is based on two phase-locked reference signals with different frequencies that together remove the phase ambiguity. The two signals are polarization-multiplexed (either in free-space or optical fiber implementations) to enable easy separation and combining of these two signals through the use of polarization beam-splitters. The disclosed scheme provides a one-to-one map between phase and feedback signal levels, and enables phase-readout and stabilization even when one of the feedback-signals is at a maximum/minimum.