Composite silicate thin films containing silver nano-particles were prepared on the glass substrate by sol-gel method to investigate the effect of annealing temperature. The sol coated samples were annealed in the oxidative air environment and subsequently reduced in pure hydrogen environment at 400, 500 and 600 degrees C for the formation of silver nano-particles. Evolution of silver nano-particles in the amorphous SiO2 matrix as a function of annealing temperature has been studied. Coating structure, morphology and optical properties of nano-particle formation in the matrix were characterized by X-ray diffraction (XRD), scanning electron microscopy (SEM) and UV-vis Spectrophotometery. Spherical, isolated and well dispersed Ag nano-particles with size between 12 and 25 nm were produced. The theoretical model based on diffusion and coalescence predicts the particle sizes close to the experimental values. (c) 2005 Elsevier B.V. All rights reserved.