We report the frequency-dependent third-order polarizabilities (gamma) of a series of hydrogen-capped silicon clusters obtained using time-dependent density functional theory. We find that the magnitude of gamma increases with a decrease in silicon cluster size, while the sign of gamma at low input photon energy changes from positive to negative when the ratio of hydrogen saturation increases. At higher input photon energy, the sign of gamma is determined mainly by cluster size. Our results rationalize several recent experiments on the optical properties of silicon nanostructures and are helpful for designing opto-electronic devices based on them. (C) 2011 Elsevier B.V. All rights reserved.