We present calculations of excitation energies and polarizabilities in large molecular systems at the local-density and generalized-gradient approximation levels of density-functional theory (DFT). Our results are obtained using a linear-scaling DFT implementation in the program system DALTON for the formation of the Kohn-Sham Hamiltonian. For the Coulomb contribution, we introduce a modification of the fast multipole method to calculations over Gaussian charge distributions. It affords a simpler implementation than the original continuous fast multipole method by partitioning the electrostatic Coulomb interactions into "classical" and "nonclassical" terms which are explicitly evaluated by linear-scaling multipole techniques and a modified two-electron integral code, respectively. As an illustration of the code, we have studied the singlet and triplet excitation energies as well as the static and dynamic polarizabilities of polyethylenes, polyenes, polyynes, and graphite sheets with an emphasis on the trends observed with system size. (C) 2004 American Institute of Physics.