The Ag nanoparticle dispersed percolative PbTiO3 ceramic thin film was prepared in situ by sol-gel method with excess lead introduced into a sol precursor. The influence of excess lead and the heat treatment time on the formation of Ag nanoparticles was investigated by energy dispersive X-ray spectra, scanning electron microscopy, X-ray diffraction, and ultraviolet-visible absorption spectra. Results showed that the excess lead introduced into the sol precursor was in favor of the crystallization of the thin film and in favor of formation of the perovskite phase without the pyrochlore phase. Lead-rich Ag-Pb alloy particles first formed in the thin films and then decomposed to become large numbers of Ag nanoparticles of about 3 nm in size in the thin films when the heat treatment time was longer than 2 min. The content of the Ag nanoparticles increased with increasing the heat treatment time. The percolative behavior appears typically in the Ag nanoparticle dispersed thin films. The dielectric constant of the thin film was about 3 times of that without Ag nanoparticles. (C) 2012 Elsevier B. V. All rights reserved.