The Van Vleck paramagnetism of Cd 1−x Fe x Te, a diluted magnetic semiconductor, is explored with electronic Raman spectroscopy of an internal transition of Fe 2+ , on the one hand, and the spin-flip Raman scattering ͑SFRS͒ from donor-bound electrons, on the other. Zeeman splitting of the Raman transition from the nonmagnetic ground state to the first excited state displays patterns consistent with energy levels responsible for the Van Vleck paramagnetism. SFRS, in turn, delineates characteristic features of the Van Vleck magnetization, as expected from s-d exchange interaction. The combination of SFRS and magnetization measurements yielded the s-d exchange constant in Cd 1−x Fe x Te, ␣N 0 = 244± 10 meV.