InP-SiO2 composite thin films were prepared by radio-frequency magnetron co-sputtering. The structure of the films was characterized by X-ray diffraction and Kaman spectroscopy. The size distribution of InP nanocrystals was observed by transmission electron microscopy. Broadening and a large red shift of the Raman peaks were observed, which can be interpreted by both the phonon confinement model and tension stress effects. Optical transmission spectra indicated that the optical absorption edges of the films can be modulated in the visible light range by changing preparation conditions. The marked blue shift of the absorption edge with respect to that of bulk InP is explained by the effective mass model.