A self-consistent cavity model is introduced to calculate optical and dielectric properties of polymer materials from the microscopic structure and molecular response. The material is treated as discrete molecules inside a cavity (chosen as spherical for convenience) and as a continuum outside. The cavity radius is to be increased progressively until the calculated properties converge within a set precision. Linear response for an isotropic polymer material is treated for three types of molecular polarizability: (a) dipolar response that is local within molecules; (b) dipolar response that is nonlocal within and between molecules; and (c) distributed monopolar and dipolar response that is nonlocal within molecules but local between molecules. In each case a microscopic expression is derived for computing the effective polarizability that gives the exact linear susceptibility from the Lorentz expression. For a poled polymer material of axial symmetry with type (c) response, expressions are derived for the anisotropic effective polarizability, the effective dipole moments under their mutual polarizing influence, the resulting dipole energy, and the poling energy in an external electric field (including quadratic terms that arise from allowing molecules to be polarizable). Nonlinear optical susceptibilities are then derived for a polymer material of arbitrary structure with type (c) response generalized to include first and second hyperpolarizabilities. In algebraic form, the results resemble those for distributed response in molecular crystals, without obvious dependence on the choice of cavity shape. (C) 2001 American Institute of Physics.