We investigate the effect of room-temperature hydrogen-plasma treatment on the photoconductivity of SiGe nanoparticles sandwiched within SiO2 layers. An increase in photocurrent intensity of more than an order magnitude is observed after the hydrogen plasma treatment. The enhancement is attributed to neutralization of dangling bonds at the nanoparticles and to passivation of nonradiative defects in the oxide matrix and at SiGe/matrix interfaces. We find that increasing the partial pressure of hydrogen to pressures where H-3(+) and H-2(+) were the dominant ions results in increased photocurrent.