Nanoclusters of PbS embedded in polymer matrices have recently been shown to have interesting optical properties with the capability of tuning the effective band gap over a wide spectral range. The results of a systematic investigation of the preparation and characterization of size-tuned PbS nanocrystals stabilized in the polymer nanotemplate of Nafion and their size-dependent physical properties are presented in this paper. These nanocrystals exhibit large characteristic blueshift in optical absorption from the bulk absorption onset value of 3020 nm. XRD and HRTEM measurements indicate the presence of PbS nanocrystals in the size range of 2-6 nm, in the regime of strong quantum confinement. Thermal and electrical properties of the polymer are found to be influenced to a great extent by the embedded PbS nanocrystals. (C) 2006 Elsevier Ltd. All rights reserved.