The multi-layer structure of barium titanate composite thin films containing Ag nanoparticles were grown on MgO (100) substrates using pulsed laser deposition technique under the nitrogen pressure of 7.4 Pa. The X-ray photoelectron spectroscopy analysis indicated that the samples were composed of metal Ag embedded in the BaTiO3 matrices. The optical absorption properties were measured from 300 nm to 800 nm, and the absorption peaks due to the surface plasmon resonance of Ag particles were observed. With the increasing of Ag concentration in composite films, the peak absorption increased and shifted to longer wavelength (red-shift). Furthermore, the third-order optical nonlinearities of the films were determined by z-scan method and the nonlinear refractive index, n(2), and nonlinear absorption coefficient, beta, were determined to be about -1.91x10(-13) m(2)/W and -5.80x10(-7) m/W, respectively. (C) 2007 Elsevier B.V. All rights reserved.