The synthesis and characterization of a polymer composite system containing quantum-confined II−VI semiconductor particles entrapped in a polyphosphazene network is discussed. A hybrid material was constructed using a guest:host approach in which the ion transporting ability of [NP(OCH2CH2OCH2CH2OCH3)2]n (MEEP) and MEEP-like polymers was exploited to allow the formation of matrix-encapsulated, nanometer-sized CdS particles. As a first step, a cadmium thioglycolate precursor [Cd10(SCH2CH2OH)16](NO3)4 was found to react in solution to generate stable, soluble, CdS particles. These particles were characterized and found to be 25 Å in diameter. They exhibited an absorption at 362 nm, which was blue-shifted relative to the absorption of bulk CdS. This indicates a quantum confinement effect associated with nanometer-size particles. Second, a method was developed for the incorporation of CdS particles into a cross-linked polyphosphazene-based polymer network, and CdS particles were successfully grown within these polymer films. The CdS-containing polyphosphazene films were transparent and homogeneous. However, no significant control was achieved over the particle size dispersity. The polymer-encapsulated particles were larger than the solution-synthesized ones, with an average diameter of 70 Å diameter. They demonstrated a correspondingly smaller blue shift in the absorption spectrum, with an absorption at 470 nm. The morphology of these particles was examined.