Generation of magneto-optic effects by the interaction of the CMB with cosmic magnetic fields is studied. Effects which generate polarization such as the Cotton–Mouton effect, vacuum polarization and photon–pseudoscalar mixing in external magnetic field are studied. Considering the CMB linearly polarized at decoupling time, it is shown that photon–pseudoscalar mixing in external magnetic field, the Cotton–Mouton effect in plasma and the vacuum polarization in cosmic magnetic field, would generate elliptic polarization of the CMB depending on the photon frequency and magnetic field strength. Among standard magneto-optic effects, the Cotton–Mouton effect in plasma turns out to be the dominant effect in the generation of CMB elliptic polarization in the low frequency part ν0∼108–109Hz with degree of circular polarization PC(T0)≃10−10–10−6 for magnetic field amplitude Be0∼1nG–100nG. The vacuum polarization in magnetic field is the dominant process in the high frequency part ν0≥1010Hz where the degree of circular polarization at present is PC(T0)≲10−11 in the best scenario. The effect of pseudoscalar particles on the CMB polarization is also studied. It is shown that photon–pseudoscalar particle mixing in cosmic magnetic field generates elliptic polarization of the CMB as well and even in the case of initially unpolarized CMB. New limits/constraints on the pseudoscalar parameter space are found. By using current limit on the degree of circular polarization of the CMB, the upper limit of |gϕγ|<4.29×10−19(G/Be0)GeV−1 for mϕ<1.6×10−14eV in the weak mixing case is found. If |gϕγ|<1.17×10−24(G/Be0)GeV−1, a value of the order |gϕγ|≃10−26(G/Be0)GeV−1 for mϕ≃1.6×10−14eV in the resonant case, from large scale temperature anisotropy is obtained. Prior decoupling CMB polarization due to pseudoscalar particles is also discussed.