Recent magneto-optical investigations of exotic rare-earth compounds, such as reduced-moment magnets and magnetic superconductors, are critically reviewed. Representatives of the first class are cerium compounds like CeSb and CeRh₃B₂. The former material has attracted particular theoretical attention due to its record Kerr rotation of 14°. CeRh₃B₂ raised the question, whether a Curie temperature of 115 K can originate from reduced Ce moments. A line shape analysis of the magneto-optical spectra shows that Ce, indeed, is responsible for the moment in CeRh₃B₂ and it allows to specify the nature of its ground state.Representatives of the second class are Chevrel phases containing Eu²⁺ ions. The characteristic magneto-optical spectrum of this ion has been identified in various Eu_1-xPb_xMo₆S₈ and Eu_1-xSn_xMo₆S_8-y Se_y Chevrel phases. The temperature and field dependence of the Kerr rotation allow a study of the evolution of the spin polarization of the 4f⁷ state in the normal, superconducting and field-induced superconducting state.