Al2O3 thin films containing dispersed Au metal particles were prepared on quartz glass substrates by radio-frequency (r.f.) co-sputtering technique and subsequent annealing at different temperatures (200degreesC, 400degreesC and 600degreesC) in argon atmosphere. Transmission electron microscope images demonstrated a homogeneous distribution of nanoparticles in the matrix with average size varied from 3.2 to 46 nm depending on the temperature of annealing. Optical absorption measurements revealed a band in between 500 and 550 nm due to the surface plasmon resonance of the Au. particles in the Al2O3 matrix. The transmission electron diffraction study of some composite films revealed that the nanoparticles formed in the films are in crystalline state. Effects of the incorporated metal particles on the optical properties of the composite films in the visible spectral range were investigated. (C) 2002 International Association for Hydrogen Energy. Published by Elsevier Science Ltd. All rights reserved.