Thin films have been grown on silicon and silica substrates by cosputtering of silica and silver in Ar, Ar+2.5 % O-2, and Ar+5 % O-2 gas mixtures. Rutherford backscattering spectrometry showed that the films have Ag atomic fractions x(Ag) in the range of similar to1 to similar to10 at. %, and, by valence considerations, that the fraction of oxidized Ag in the films deposited in presence of oxygen is limited. Transmission electron microscopy images revealed the presence of Ag nanoclusters, with a mean size diameter not larger than 5 nm. The clusters are preferentially arranged along columns. It is suggested that the columns are regions with diameter in the nanometer range in which the density of the dielectric matrix is lower, thus favoring the formation of metal clusters. In presence of O-2, the clusters were observed to have a more regular spherical shape. The optical absorption spectra of films grown in presence of O-2 are distinguished from those grown in Ar by specific. features, which are attributed to oxidation at the cluster surface. (C) 2005 American Vacuum Society.