Time-resolved multiphoton photoelectron spectroscopy is employed to study collective excitations and their decay dynamics in silver nanoparticles on highly oriented pyrolytic graphite. Resonant excitation of the surface plasmon in the silver nanoparticles with 400 nm femtosecond radiation allows to distinguish between photoemission from the nanoparticles and the substrate. This extends the method of time-resolved two-photon photoemission spectroscopy to inhomogeneous surfaces and permits to probe the dynamics of a confined electron gas. The multiphoton photoelectron spectra, the polarization dependence of the photoelectron yield and the time-resolved measurements reveal the double excitation of the surface plasmon and allow the identification of two different decay channels of the collective excitation. The multiply excited plasmon transfers its total excitation energy to a single photoelectron or decays into at least two single-particle excitations which share the total energy. (C) 2000 American Institute of Physics. [S0021-9606(00)70711-2].