Abstract
The effect of level degeneracy on saturated absorption in a resonant medium is considered using a simple but realistic three-level system to model J=1J=0 atomic transition. Assuming homogeneous broadening and exact resonance, an analytic nonperturbative expression for the medium susceptibility is obtained and used to study propagation of an arbitrarily polarized optical field. Optical saturation affects considerably Zeeman-coherence-induced circular dichroism. The analysis may find application in high-resolution spectroscopy and other branches of nonlinear optics.