CdS and CdSe nanoparticles have been prepared using conducting poly(3-hexylthiophene) (P3HT) matrix with an objective to understand the effect of nanoparticles on the polymer matrix using electrochemical and spectroscopic techniques. The spectroscopic results reveal that the electronic structure of polymer is strongly influenced by the characteristics of embedded semiconducting nanoparticles. SEM and TEM images show the ordered morphology of the CdS and CdSe nanoparticles in presence of the polymer matrix. Cyclic voltammetry performed both in the presence and absence of light enables us to understand the redox changes in P3HT due to CdS and CdSe quantum dots such as the generation of free radical in the excited state and their electrochemical band gaps. (C) 2005 Elsevier Ltd. All rights reserved.