As part of a general study of the time-dependent local density approximation (TDLDA), we here report calculations of optical activity of chiral molecules.The theory automatically satisfies sum rules and the Kramers-Kronig relation between circular dichroism and optical rotatory power. We find that the theory describes the measured circular dichroism of the lowest states in methyloxirane with an accuracy of about a factor of two. In the chiral fullerene C 76 the TDLDA provides a consistent description of the optical absorption spectrum, the circular dichroism spectrum, and the optical rotatory power, except for an overall shift of the theoretical spectrum. *