We study the propagation effects of radio waves in a pulsar magnetosphere, composed of relativistic electron–positron pair plasmas streaming along the magnetic field lines and corotating with the pulsar. We critically examine the various physical effects that can potentially influence the observed wave intensity and polarization, including resonant cyclotron absorption, wave mode coupling due to pulsar rotation, wave propagation through quasi‐tangential regions (where the photon ray is nearly parallel to the magnetic field) and mode circularization due to the difference in the electron/positron density/velocity distributions. We numerically integrate the transfer equations for wave polarization in the rotating magnetosphere, taking account of all the propagation effects in a self‐consistent manner. For typical magnetospheric plasma parameters produced by pair cascade, we find that the observed radio intensity and polarization profiles can be strongly modified by the propagation effects. For a relatively large impact parameter (the minimum angle between the magnetic dipole axis and the line of sight), the polarization angle profile is similar to the prediction from the Rotating Vector Model, except for a phase shift and an appreciable circular polarization. For a smaller impact parameter, the linear polarization position angle may exhibit a sudden 90° jump due to the quasi‐tangential propagation effect, accompanied by a complex circular polarization profile. Some applications of our results are discussed, including the origin of non‐Gaussian pulse profiles, the relationship between the position angle profile and circular polarization in conal‐double pulsars, and the orthogonal polarization modes.