Thin films of TiO2:Au (Ag) are deposited by r.f. reactive sputtering from Ti:Au(Ag) mosaic targets. In order to affect the distribution of metal in the dielectric matrix, an ex-situ post-deposition heat-treatment is carried out in air at 670 K for I h. Nanocermets with 5-7 nm crystalline noble metal inclusions embedded in the transparent dielectric matrix of TiO2 are obtained. The surface plasmon resonance (SPR) manifests itself as an additional absorption peak at lambda(R) = 600-650 nm for Au concentrations less than 47 at.% Au. (C) 2003 Elsevier B.V. All rights reserved.