The third-order nonlinear optical (NLO) response of colloidal "quantum-dot" cadmium sulfide (CdS) nanocrystals has been measured both in solution and in Langmuir-Blodgett (L-B) multilayers of a polydiacetylene (PDA) "alloy" NLO polymer. The PDA "alloy" was composed of a tailored mixture of diacetylene monomers having carboxylic acid "head" groups and benzamide "head" groups, in each case separated from the diacetylene moiety by an eight-carbon spacer group, so as to disrupt the strong aggregation, leading to excessive light scattering, that normally occurs with L-B films of carboxyl-terminated PDAs. It is shown that at 530 nm the nonlinear refractive index (nz) of a nanocomposite PDA film containing thiophenol-capped CdS nanocrystals, as measured by both Z-scan and degenerate four-wave mixing (DFWM) techniques, is 11. x 10(-8) cm(2)/MW, while that of an undoped PDA film is only 3 x 10(-8) cm2/MW. This demonstrates the concept of a "nonlinear-nonlinear" optical material, in which the NLO response of an embedded quantum-dot semiconductor can add constructively to that of a NLO polymer having complementary wavelength characteristics.