A novel rectangular lattice photonic crystal fiber is proposed which is composed of a central defect core and a cladding with square mesh structure by introducing another air hole row between two air hole rows for every other line into a conventional rectangular lattice photonic crystal fiber. Its dispersion, birefringence and confinement loss are numerically investigated by full vector finite element method with anisotropic perfectly matched layers. Numerical results indicate that the proposed fiber shows higher birefringence negative dispersion effect and stronger confinement ability of guided mode, in which the confinement loss is lower than 10-2 dB ·m-1. The wavelength for high birefringence negative dispersion can be optimized by adjusting the parameters of proposed fiber, such as Λ and d/Λ. The dispersion and the dispersion slope are both negative, the birefringence is higher than 10-2, and nonlinear parameter is close to 55 km-1W-1 over C band (i.e. 1.53—1.565 μm) under the condition of Λ=2.0 μm and d/Λ=0.4. This fiber will have important applications in the fields of polarization maintaining transmission system and dispersion compensation, and also in the design of widely tunable wavelength converter based on four-wave mixing.