In this paper, we investigate an N_t × N_r dual-polarized multiple input multiple output (DP-MIMO) channel model and address how the cross-polarization components affect the performance of the DP-MIMO system. A novel precoding design based on oblique projection is proposed to effectively suppress the interference caused by the cross-polarization components. Moreover, considering a 2 × 1 dual-polarized antennas based system, rate-2 accompanied with diversity order of 2 in symbol error rate (SER) performance is achieved by using the proposed precoding design, compared with its counterpart without precoding techniques. The expression of the moment generating function (MGF) of signal-to-noise ratio (SNR) for the proposed scheme is derived, and an analytical expression of SER with M-ary phase-shift keying (M-PSK) modulation is obtained. Extensive numerical results are given to unveil the effectiveness of the proposed scheme.