The interband transition contributions to the optical properties of silver nanoparticles in fluoropolymer matrices are investigated. For the materials in this study, nanoparticle synthesis within the existing polymer matrix is accomplished using an infusion process that consists of diffusing an organometallic precursor gas into the free volume of the fluoropolymer and decomposing the precursor followed by metal nanoparticle nucleation and growth. The resulting polymer matrix nanocomposite has optical properties that are dominated by the response of the nanoparticles owing to the broadbanded transparency of the fluoropolymer matrix. The optical properties of these composites are compared to Maxwell-Garnett and Mie theory with results indicating that interband transitions excited in the silver nanoparticles affect the optical absorption over a range of frequencies including the surface plasmon resonance. It is shown that calculations of the optical absorption spectrum using published data for the silver dielectric function do not accurately describe the measured material response and that a classical model for bound and free electron behavior can best be used to represent the dielectric function of silver.