The Monte Carlo ray-trace method may be extended to describe radiant exchange for situations in which polarization, diffraction, and interference play a significant role. This requires that the definition of the “ray” be modified to include aspects of wave-like behavior such as wavelength, phase, and polarization state. Following a brief introduction to physical optics, examples from the recent literature are considered in which the MCRT method is used to evaluate the influence of these phenomena on radiation heat transfer.