The growth and optical properties of nanocomposite thin films comprising of nanocrystalline Sn and Si are reported. The nanocomposite films are produced by thermal annealing of bilayers of Sn and Si deposited on borosilicate glass substrates at various temperatures from 300 to 500 A degrees C for 1 h in air. X-ray diffraction reveals that the as-deposited bilayers consist of nanocrystalline Sn films with a crystallite size of 30 nm, while the Si thin films are amorphous. There is onset of crystallinity in Si on annealing to 300 A degrees C with the appearance of the (111) peak of the diamond cubic structure. The crystallite size of Si increases from 5 to 18 nm, whereas the Sn crystallite size decreases with increase in annealing temperature. Significantly, there is no evidence for any Sn-Si compound, and therefore it is concluded that the films are nanocomposites of Sn and Si. Measured spectral transmittance curves show that the films have high optical absorption in the as-deposited form which decreases on annealing to 300 A degrees C. The films show almost 80 % transmission in the visible-near infrared region when the annealing temperature is increased to 500 A degrees C. There is concomitant decrease in refractive index from 4.0, at 1750 nm, for the as-deposited film, to 1.88 for the film annealed at 500 A degrees C. The optical band gap of the films increases on annealing (from 1.8 to similar to 2.9 eV at 500 A degrees C). The Sn-Si nanocomposites have high refractive index, large band gap, and low optical absorption, and can therefore be used in many optical applications.