Nanocomposite thin films formed by metal or semiconductor nanocrystal (NCs) embedded in a host exhibit interesting nonlinear optical properties relate to the small size of the NCs. These properties make these materials potential candidates for the development of all-optical switching devices. The challenge is to produce nanocomposite materials with controlled and suitable characteristics. The present work aims to show that nanocomposite materials produced by pulsed laser deposition (PLD) might have superior structural and non-linear optical properties than those obtained by other techniques. This result will be illustrated in systems formed by metallic NCs embedded in an Al2O3 host. Fundamental aspects related to the nucleation and growth mechanisms or the reactivity of the NCs with the host will be discussed. Finally, the excellent nonlinear properties of the PLD synthesized composites will be illustrated in the case of Cu:Al2O3 films, in which the dependence of the nonlinear third order optical susceptibility has been investigated as a function of the NCs size and (chi) (3) values as large as 10-7 esu have been achieved.© (1999) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.