Optical activity and its relation with chiral metal nanoparticles are revised in this tutorial review. The experimental evidence as well as the different mechanisms to explain the optical activity of ligand-protected nanoparticles are described, emphasizing the aspects that provide insights into this novel phenomenon at the nanoscale. The perspectives of this research field and a list of unsolved problems are presented. This tutorial review provides information for an interdisciplinary community working in synthesis, characterization and utilization of chiral metal nanoparticles.