Cu/ZnO composite films with different Cu contents were prepared on quartz glass substrates by r.f. co-sputtering technique. The as-grown films were annealed at different temperatures in argon atmosphere for 2h. TEM images revealed the formation of nanoparticles, which are distributed homogeneously in the ZnO matrix. The size of the nanoparticles increased with the increase of Cu content in the films and with the temperature of annealing. X-ray diffraction spectra revealed the peaks of partially oxidized copper along with the peaks that correspond to ZnO matrix. Optical absorption spectra of the films revealed the characteristic plasmon resonance absorption peak of small Cu particles. The intensity of the plasmon resonance peak increased either on increasing the Cu content in the films or on increasing the annealing temperature.