Polarization microscopy is a tool to investigate Langmuir monolayers in situ on a water surface as a function of environmental parameters such as lateral pressure, temperature, pH and concentration of contaminants, compression speed, and solvent. An anisotropically reflecting monolayer domain alters the polarization state of the reflected light and will have an orientation-dependent observable intensity. The contrast between domains of different orientation in such a film can be enhanced significantly when either the polarizer or analyzer is slightly rotated from the crossed position. The contrast between differently oriented domains is very large for molecules that have strong absorption. Domains in such films can be observed with the unaided eye. Staining of the sample is not required. Lateral resolution near Abbe’s limit is obtained. A theory is developed to describe the effects. The theory is verified by analyzing the reflection from both a birefringent crystal and Langmuir monolayers of a molecule with anisotropic polarizabilities. Applications of the method to investigate monolayers are discussed. The described technique reveals information on the orientation of the polarizability axes of the domains or structures in a film and on the range and defects of orientational order within monolayers.