The Ag nanocomposite polymer films were prepared by in situ synthesis. The presence of silver nanoparticles is confirmed by transmission electron microscopy (TEM) and electron diffraction (ED), which show that the particles’ average sizes are about 10 nm and the particles can be dispersed in a polymer matrix. Nonlinear optical measurements, performed by Z-scan techniques, are further presented. The addition of silver nanoparticles to the polymer film leads to the enhancement of nonlinear optical properties. The nonlinear refractive index and nonlinear absorption coefficient are measured to be 3.708×10 −15 m 2/W and 1.221×10 −8 m/W, respectively. The enhanced nonlinear optical properties are due to the surface plasmon resonance of silver nanoparticles. The Ag nonlinear polymer film shows promise for practical use in all optical devices.