We calculate the polarization of psi' due to gg--><Q(Q)over bar>[L-2S1(J)(8)]g-->psi((lambda) color-octet quarkonia production. We find tha
t at low transverse momenta the psi' is unpolarized due to the contrib
utions proportional to the L=S=0 and L=S=1 color-octet matrix elements
. As p(perpendicular to) increases, the psi' mesons become 100% polari
zed, as predicted by fragmentation calculations. Polarization due to l
owest-order color-singlet production is also considered, which qualita
tively has a similar shape to the color-octet production.