The Faraday rotation spectrum of composites containing magnetite nanoparticles is found to be dependent on the interparticle spacing of the constituent nanoparticles. The composite materials are prepared by combining chemically synthesized Fe 3 O 4 ͑magnetite͒ nanoparticles ͑8-nm diameter͒ and poly͑methylmethacrylate͒. Composites are made containing a range of nanoparticle concentrations. The peak of the main spectral feature depends on nanoparticle concentration; this peak is observed to shift from approximately 470 nm for ͑dilute composites͒ to 540 nm ͑concentrated͒. We present a theory based on the discrete-dipole approximation which accounts for optical coupling between magnetite particles. Qualitative correlations between theoretical calculations and experimental data suggest that the shifts in spectral peak position depend on both interparticle distance and geometrical configuration.