A simple method to optically synthesize Ag nanoparticles in Ge2Sb2Te5 phase change matrix is described. The fine structures of the locally formed phase change chalcogenide nanocomposite are characterized by high-resolution transmission electron microscopy. The formation mechanism of the nanocomposite is discussed with temperature evolution and distribution simulations. This easy-prepared metal nanoparticle-embedded phase change microstructure will have great potential in nanophotonics applications, such as for plasmonic functional structures. This also provides a generalized approach to the preparation of well-dispersed nanoparticle-embedded composite thin films in principle. (C) 2012 Elsevier B.V. All rights reserved.