We report large polarization state rotations of a weak pulsed beam in CdTe/CdMnTe quantum wells photoinduced by intense circularly polarized pulsed pump beam. Time-resolved analysis of the effect shows that, at moderate pump fluences, the polarization state rotation is due to the combined effect of many-body interactions and spectral hole burning at early times and to photoinduced magnetization at longer ones. At higher pump fluences, space filling and degenerate four-wave mixing become important. At low pump fluences (few&mgr;J/cm2) already the polarization rotation photoinduced at early times can be as large as a few degrees making these multiple quantum wells potential candidates for applications. ©1998 American Institute of Physics.