AbstractReactive magnetron sputtering was employed to prepare nanocomposite thin films of Ag/Al2O3, on a glass substrate. The films are characterized by the formation of Ag nanoparticles embedded in the Al2O3 matrix, after thermal treatment at 600 °C, which are responsible for the appearance of an outstanding pronounced and narrow localized surface plasmon resonance (LSPR) band. Electron microscopy analysis also revealed the presence of larger Ag fractal aggregates at the film’s surface, responsible for a broad band absorption. Noteworthily, the LSPR band maximum remains at the same position (about 412 nm) for Ag concentrations ranging from 23 to 34 at.%, despite some discernible alterations in both LSPR band intensity and width. An optimized thin film is characterized by full transparency in non-resonant wavelengths due to suppression of Ag aggregates at the film’s surface, while maintaining the LSPR behavior. To better explain the plasmonic behavior of the Ag/Al2O3 films, discrete dipole approximation was used to determine the extinction, scattering, and absorption efficiencies of Ag spheres surrounded by an Al2O3 cap layer. This allowed to ascertain some nanostructural features of the films, pointing to the formation of Ag nanoparticles with average sizes in the order of 40 nm.