The first observation of optical activity and circular dichroism in the defect chalcopyrite semiconducting compound □CdGa2S4 is reported. Optical absorption spectra were recorded at 300 and 25 K under non-polarised radiation as well as under different directions of polarisation of incident radiation. In the transparent region (400–900 nm) the optical absorption depends strongly on the direction of polarisation, confirming that □CdGa2S4 is a dichroic crystal. Therefore it is an ideal material as a sensor for polarised radiation. Copyright © 1999 John Wiley & Sons, Ltd.