Composite films consisting of nanoscale Au particles uniformly embedded in barium. titanate (BaTiO3) matrices (Au:BaTiO3) were prepared by alternate ablation of metallic Au and ceramic BaTiO3 targets using pulsed laser deposition (PLD) technique. Average diameters of the Au particles were in the range of 2-3 nm. The third-order optical nonlinearity of the composite films was investigated using the z-scan method at the wavelength of 532 nm with a laser duration of 10 ns. The nonlinear refractive index n(2) and the nonlinear absorption coefficient beta (m/W) were determined to be -2.42 x 10(-6) esu and 2.22 x 10(-6) m/W respectively. (C) 2003 Elsevier Science B.V. All rights reserved.