The unique capability of magnetic circular dichroism (MCD) in revealing geometry and electronic information has provided new opportunities in exploring the relationship between structure and magneto‐optical properties in nanomaterials with extraordinary optical absorption. Here, the representative studies referring to application of the MCD technique in semiconductor and noble metal nanomaterials are overviewed. MCD is powerful in elucidating the structural information of the excitonic transition in semiconductor nanocrystals, electronic transitions in noble metal nanoclusters, and plasmon resonance in noble metal nanostructures. By virtue of these advantages, the MCD technique shows its unrivalled ability in evaluating the magnetic modulation of excitonic and plasmonic optical activity of nanomaterials with varied chemical composition, geometry, assembly conformation, and coupling effect. Knowledge of the key factors in manipulating magneto‐optical properties at the nanoscale acquired with the MCD technique will largely boost the application of semiconductor and noble nanomaterials in the fields of sensing, spintronic, nanophotonics, etc. Magnetic circular dichroism shows indispensable capability in elucidating the Zeeman splitting of the excitonic transition in semiconductor nanocrystals, the electronic information of discrete optical transitions in noble metal nanoclusters, and the geometry modulation of plasmon resonance in noble metal nanostructures. Key strategies in designing magneto‐optically active advanced nanomaterials are highlighted for potential applications in fields of sensing, spintronics, and nanophotonics.