We analyze the transition from passive mode locking into the novel modulational-instability regime of erbium-doped fiber lasers. By including in the cavity an anisotropic loss, we observed, depending on the polarization setting, the generation of either single pulses as short as 435 fs or a continuous-wave train of 3.5-ps-long solitons at a repetition rate of 76 GHz. Even with no anisotropic losses in the cavity, soliton trains at a repetition rate of as high as 130 GHz were still observed. We believe that this is the first observation of a self-induced modulational-instability laser.
