We herein report a modified, in situ photolytic process for the nucleation and growth of cadmium sulphide nanoparticles in the presence of an optically transparent and semicrystalline polyvinyl alcohol (PVA) polymer matrix. The laser causes a localized decomposition of the precursor species in the immediate vicinity of the polymer leading to highly confined nanocrystals. The as-synthesized PVA-CdS nanocomposite were characterized using UV-vis absorption and photoluminescence spectroscopy, scanning electron microscopy (SEM), transmission electron microscopy (TEM), high resolution TEM (HRTEM) and powdered X-ray diffraction (XRD). Strong blue shift in the band gap was observed in UV visible absorption spectrum indicating the size confinement. The influence of deposition temperature (25-200 degrees C) on the optical properties, microstructure, and thermal stability was also investigated. Thermal decomposition behaviors of these composites exhibit decreased thermal stability as indicated by the shift in the decomposition temperature of the pure PVA. XRD patterns revealed a reduction in the crystallinity of the polymer due to the entrapped particles. The nanocomposites showed the existence of both cubic and hexagonal phases. (C) 2013 Elsevier B.V. All rights reserved.