Magnetic circular dichroism (MCD) of trivalent rare earth doped lithium niobate crystals is reported for the first time. Magneto-optical signals of Nd3+ and Yb3+ ions have been studied at 2 K as a function of the magnetic field strength up to 5 T. This study allows the identification of the Zeeman sublevels of these ions, which can be labeled by irreducible representations (Gamma(4), Gamma(5), or Gamma(6)), so that the sign and allowance of transitions can be predicted. From the dependence of suitable MCD spectral lines on the magnetic field strength, the effective gyromagnetic factor of the ground state has been determined for both ions: (g(Nd))(parallel to)=1.4 +/- 0.1 and; (g(Yb))(parallel to)=4.7 +/- 0.1.