SiO2 films containing nickel were prepared using the sol-gel method with nominal Si to Ni atomic ratios of 1.2, 3.1 and 7.1. After thermal annealing under different conditions, the optical properties of the films were studied using optical reflectance and transmittance measurements. It was found that samples annealed in air at 500degreesC show an absorption band at wavelengths of about 440 nm associated with Ni2+ ions in octahedral positions. In addition, in films with Si to Ni atomic ratios of 1.2 and 3.1, there is an absorption edge at short wavelengths, indicating the formation of NiO nanosized particles. Samples with a Si to Ni atomic ratio of 1.2 were also heat-treated in a H-2/ N-2 atmosphere at 500 and 800degreesC, producing metallic Ni nanoparticles embedded in the vitreous matrix. The effective dielectric function of both NiO-SiO2 and Ni-SiO2 composite films was modeled with the Maxwell-Garnett expression. X-ray diffraction measurements confirm the presence of NiO and Ni nanoparticles in the films. (C) 2004 Elsevier B.V. All rights reserved.