The dependences of magneto-optical effect, effective optical constants, and giant magnetoresistance (GMR) on the thickness of Cu layers were investigated in NiCo/Cu multilayers prepared by rf magnetron sputtering. A peak of saturation polar Kerr rotation θK, occurred simultaneously with that of GMR ratio when the Cu thickness is around 1.0 nm, where a clear drop of the effective optical constants n and k appeared. The peak of θK is mainly caused by the reduction of the effective optical constants, which dominate over the small drop of the effective off-diagonal elements of the dielectric tensor. The concurrent variation of GMR and θK is related to antiferromagnetic interlayer coupling, which may change the electron band structure and thus the optical and magneto-optical transitions of electrons. © 1998 American Institute of Physics.