We develop response-function algorithms for dipole moments and transition dipole moments for compressed multistate pair-density functional theory (CMS-PDFT). We use the method of undetermined Lagrange multipliers to derive analytical expressions and validate them using numerical differentiation. We test the accuracy of the magnitudes of predicted ground-state and excited-state dipole moments, the orientations of these dipole moments, and the orientation of transition dipole moments by comparison to experimental data. We show that CMS-PDFT has good accuracy for these quantities, and we also show that, unlike methods that neglect state interaction, CMS-PDFT yields correct behavior for the dipole moment curves in the vicinity of conical intersections. This work, therefore, opens the door to molecular dynamic simulations in strong electric fields, and we envision that CMS-PDFT can now be used to discover chemical reactions that can be controlled by an oriented external electric field upon photoexcitation of the reactants.