Bi2O3-B2O3-SiO2 ternary glasses embedded with Ag nanoparticles were prepared by introducing AgCl into the bismuthate glasses using conventional melt quenching method and characterized by several experimental techniques. Scanning electron microscopic studies indicated the formation of Ag contained nanoclusters which crack and become regular with increase of AgCl content in these composites. Optical absorption spectra of the nanocomposites showed the presence of absorption band of surface plasmon resonance (SPR) due to Ag nanoparticles at similar to 600 nm. Z-scan measurement with femtosecond laser was used to investigate third-order optical nonlinearities of the nanocomposites. The results show that the nonlinear refraction gamma was dramatically increased up to 30 times by the appearance of Ag nanoparticles when excited within its SPR region, while nonlinear absorption due to two-photon absorption exhibited opposite tendency or even saturated behavior. The calculation of figure of merit suggests that the Ag particle embedded Bi2O3-B2O3-SiO2 glass composites are promising candidates for optoelectronic devices. (C) 2010 Elsevier Ltd. All rights reserved.