The paper investigates the use of dual-polarization antenna for the mitigation of multipath effect in urban environment. The goal is to not only distinguish and exclude multipath components but also exploit the potential benefit in fusing direct LOS and multipath components for the determination of enhanced PVT solution. More precisely, a two-channel model is developed to characterize the received signals at RHCP- sensitive and LHCP-sensitive outputs from direct LOS and multipath inputs. A system identification approach is employed to determine the coefficients associated with the model. An adaptive filter is then used to account for the multipath components. Consequently, the contribution of the multipath component can be accounted and indeed effectively used in the position/time determination stage. To demonstrate the feasibility and effectiveness of the proposed approach, results from two experiments are presented. Open-sky experiment is first performed to analyze the antenna property and characteristics of the two distinct polarization outputs. The proposed method is then implemented in a software receiver and tested in an urban environment with strong probability of multipath interference. In the test, an unmodified receiver is subject to multipath induced positioning errors. In contrast, through the use of the proposed approach, the positioning results are significantly improved as the multipath components are accommodated. The feasibility and effectiveness of the proposed method in mitigating the multipath effect in urban environment is thus demonstrated.