We prepared undoped and Cu doped ZnO semiconducting nanoparticles (NPs) by chemical co-precipitation method and obtained Cu doped ZnO–polyvinyl alcohol (PVA) nanocomposite thin films by spin coating to investigate third order nonlinear optical and optical limiting properties under cw laser excitation. Powder samples of NPs were characterized by X-ray diffraction (XRD), field emission scanning electron microscopy (FE-SEM), energy dispersive spectroscopy, transmission electron microscopy, ultraviolet–visible (UV–vis) and Fourier transform infrared spectroscopy. XRD pattern and FE-SEM micrograph revealed the presence of hexagonal wurtzite phase ZnO NPs having uniform morphology with average particle size of 20nm. The presence of excitons and absorption peaks in the range 343–360nm, revealed by UV–vis study, were attributed to excitons in n=1 quantum state. Third order NLO properties of all composite thin films were investigated by He–Ne continuous wave (cw) laser of wavelength 632.8nm using Z-scan technique. Thermally stimulated enhanced values of nonlinear refraction and absorption coefficients were obtained which may be attributed to self-defocusing effect, reverse saturable absorption, weak free carrier absorption and surface states properties originated from thermo optic effect. Optical limiting properties have been studied using cw diode laser of wavelength 808nm and results are presented.