As the development of optical communication networks progresses, the demand for ultrafast optical switching with terahertz operation is rising. Nonlinear optical (NLO) materials with large third-order nonlinear susceptibility chi((3)[1]) and a small relaxation time t(1) of the photoexcited states are indispensable to these devices. Recently, it has been reported that 1D Mott insulators of halogen-bridged Ni-chain compounds exhibit large chi((3)[2]) and small t(1).([3]) For the application of these Ni compounds to ultrafast optical switching devices using, for example, optical waveguides, fabrication of a thin film is a most important issue. Here, we report a method for the fabrication of high-quality thin films, in which nanocrystals of a Ni compound with alkyl chains are dispersed in an optical polymer, PMMA (poly(methyl methacrylate)). In these films, terahertz repetition of optical switching by two-photon absorption (TPA) processes is demonstrated. The present approach represents a new strategy for the application of transitionmetal compounds to optical switching devices.