We report an experimental realization of entanglement concentration using two polarization-entangled photon pairs produced by pulsed parametric down-conversion. In the meantime, our setup also provides a proof-in-principle demonstration of a quantum repeater. The quality of our procedure is verified by observing a violation of Bell's inequality by more than 5 standard deviations. The high experimental accuracy achieved in the experiment implies that the requirement of tolerable error rate in multistage realization of quantum repeaters can be fulfilled, hence providing a useful toolbox for quantum communication over large distances.