Polarization spectroscopy makes use of the polarization dependence of the nonlinear interaction between two laser beams in a gaseous medium. The laser-induced optical anisotropy is calculated using a rate equation approach, and the effect of this anisotropy on a polarized probe beam is derived. The method is useful for Doppler-free spectroscopy, for similification of molecular spectra, and for relaxation studies. A comparison with other Doppler-free saturation spectroscopy methods shows an advantage in signal-to-noise for polarization spectroscopy. Recent high resolution experiments with hydrogen, molecular sodium, and nitrogen dioxide are presented.