We revealed the mechanism of circular dichroic inversion of cellulosic/polymer cholesteric liquid crystalline (ChLC) composites induced by applying compressive stress through a modeling approach. We examined the circular dichroic behavior of a simple system, which is a ChLC composite superimposed with compressed non-ChLC composite, to avoid structural change in ChLC. Theoretical circular dichroism spectra of the superimposed composites were calculated from the model based on the birefringence of the compressed sample and showed good agreement with experimental spectra. Hence, the stress-induced circular dichroic inversion was found to be caused by the linear orientation of component polymers of composites due to compression. Recovery of original circular dichroism by thermal treatment was also explained in terms of the relaxation of the linearly oriented component polymers.