In this paper, differential polarization-phase-shift keying (DPolPSK) is proposed for digital lightwave communication, in which information is encoded in both polarization and phase. The DPolPSK symbols are demodulated by optical delayed interference and electrical multilevel detection, without using any polarization control or polarization selection at the receiver. Simulation results show that single-channel error-free transmission at 20 Gb/s (10 Gsymbol/s) through 25 spans of 100 km standard single-mode fiber is possible. Unlike for DPSK, the Gaussian BER estimation method is found to be reasonably accurate for this new modulation format. The constellation diagram of DPolPSK can be represented by a set of Jones vectors. Hence DPolPSK can also be called differential Jones-vector shift keying (DJSK).