We present the results of spatially resolved optical spectropolarimetr
y of the distant (z = 1.2) radio galaxy 3C 324 obtained with the W. M.
Keck telescope. The spatially integrated linear polarization is P app
roximate to 11% with the electric vector oriented perpendicular to the
UV continuum axis. The polarization of the continuum and the position
angle of the electric vector are constant with wavelength. In additio
n, we find that the polarization is spatially extended, but it does no
t show strong variations along the major axis of the UV continuum. We
detect the broad permitted emission line of Mg II lambda 2800 in the p
olarized spectrum. The polarization of the narrow forbidden emission l
ine of [O II] lambda 3727 is small. Scattering of anisotropic radiatio
n emitted by a hidden quasar nucleus is the favored mechanism to expla
in the observed properties. The significant reddening required to mode
l the observed total flux and polarized spectra, and to explain the sm
all residual [O II] lambda 3727 line polarization, suggests that a sub
stantial amount of dust is present. Scattering by hot (T-e > 10(6) K)
electrons can be ruled out by the velocity width of the polarized Mg I
I lambda 2800 line. The required masses of scattering particles and th
e presence of dust in 3C 324 suggest that dust scattering is dominant
in individual clouds, but a contribution by warm electron scattering c
annot be excluded. Despite the large uncertainties, our data suggest t
hat a fraction of the total UV flux is due to unpolarized radiation em
itted in situ and whose nature is presently unclear. We detect a faint
companion galaxy along the radio axis of 3C 324 and find that its spe
ctrum shows evidence for ongoing star formation. We discuss the implic
ations of our findings and their relevance to the interpretation of th
e alignment effect, the unified model of radio-loud active galactic nu
clei, and the stellar content of high-redshift radio galaxies.