We synthesized a liquid crystalline elastomer (LCE) nanocomposite, nano-Ag/LCE, by incorporating silver nanoparticles into a monodomain polysiloxane-based LCE matrix via a novel experimental protocol. The nano-Ag/LCE was characterized by well-developed absorption band of surface plasmon resonance in visible range. The optical nonlinear absorption wasmeasured at 532nmby using open aperture Z-scan technology with 6 ns laser pulse and studied from the view of laser intensity. The nano-Ag/LCE is found to exhibit saturable absorption as well as reverse saturable absorption depending on laser intensity. Correspondingly, this material has the potential to be used as saturable absorber and optical limiter.