A novel laser‐driven polarized source of hydrogen and deuterium which is based on the principle of spin‐exchange optical pumping has been developed at Argonne. The advantages of this method over conventional polarized sources for internal target experiments is discussed. At present, the laser‐driven polarized source delivers hydrogen 8×1016 atoms/s with a polarization of 24% and deuterium at 6×1016 atoms/s with a polarization of 25%. A passive storage cell for polarized deuterium was tested in the VEPP‐3 electron storage ring. The storage cell was found to increase the target thickness by approximately a factor of three and no less in polarization was observed.