A complete magneto-optical characterization of any material requires the measurement of both, the magneto-optical and the conventional optical constants. We have developed the method of generalized magneto-optical ellipsometry (GME), which enables us to determine these material constants simultaneously in a single setup. In addition, GME even allows the determination of the magnetization orientation. The experimental setup is very simple, using only two rotatable polarizers as polarization sensitive elements. Our experimental results for permalloy demonstrate the validity of our approach and the feasibility of GME as a practical measurement technique. ©1997 American Institute of Physics.