A theory of the polymer and salt induced (psi)-type circular dichroism observed in DNA aggregates is presented. Using the main formalism developed in the previous paper to treat the interaction of light and large, dense molecular aggregates, it is shown that the anomalously large signals observed in the circular dichroism of certain molecular aggregates result from: (a) the presence of a long-range chiral structure in the aggregate; (b) derealization throughout the entire particle of the light-induced excitations in the chromophores. This derealization and the resulting "collective response" of the chromophores in the aggregate is favored in particles having a three-dimensional packing. It is shown that to describe adequately the internal field in these aggregates, intermediate and radiation coupling mechanisms should be taken into account in addition to the regular dipole-dipole interactions. Furthermore, no dipole approximation in the exponentials of the form eik·x are made. It is shown that in these circumstances, one of the circular polarizations of the light can exchange energy more efficiently than the opposite polarization. This gives rise to a circular dichroism signal whose magnitude is proportional to the overall size and long-range chiral nature of the aggregates. The theory is applied to two cases: (1) to the dimer ApA when it is shown (for the case of this small system) to reduce to the classical theories of DeVoe and Tinoco, and (2) for a toroidal aggregate of DNA of 3000 Å diameter with an internal chiral structure, as found by Haynes et al. in polylysine-DNA condensates. Good qualitative agreement with the observed spectra is found. The theory represents the first successful attempt to explain the physical origin of the psi-type CD effect. Useful information regarding the chiral structure of the aggregates can be inferred from the theory. © 1986 American Institute of Physics.