We discuss some of the effects which magnetic fields in the range 104–108 G have on the continuum emission of white dwarfs. In order to show how atomic processes are related to the transport of radiation in an anisotropic medium we introduce the radiative transfer equation for polarized light. Using this transfer equation as a guide we develop a greatly simplified model of a white dwarf atmosphere: anisotropic absorption of unpolarized light passing through a cold, optically-thin layer. Two possible sources of continuum polarization in white dwarfs with strong magnetic fields are explored, namely bound-free transitions and cyclotron absorption. Within the hydrogenic approximation we develop a further approximation which is valid for bound-free transitions when B is in the range 104–107 G. Using this approximation it is possible to obtain simple expressions for the net circular and linear polarization in terms of the zero-field opacity. In the case of cyclotron absorption, the cross section is large and strongly peaked at the cyclotron frequency, which falls in the infrared or optical for B ⩾ 108 G. This process can lead to net circular and linear polarization of comparable magnitude. For stars with non-uniform magnetic fields, the cyclotron absorption effects are spread over considerable wavelength ranges, with possibly quite complicated wavelength-dependent polarization.