The Ag:Bi2O3 composite samples with nano-sized Ag particles embedded in the bismuth oxide matrices have been prepared by using the co-sputtering method. The concentration of Ag particles was varied from 13.2 to 59.3% in the films as determined by Rutherford back-scattering method. The surface plasma resonance peaks shown in the optical absorption spectra are shifted to the long wavelength with increasing Ag concentration because of the increasing electromagnetic interaction between metal particles and the Mie multiple scattering effect. The complex refractive index data obtained by the ellipsometric method are qualitatively in agreement with the simulated ones based on the effective mass approximation model that is suitable for the structure of composite films as revealed by the transmission electron microscope image picture. (C) 2003 Elsevier B.V. All rights reserved.