In this study, we present theoretical and experimental analyses on the waveguide mode properties of prism-coupled Au:SiO2 nanocomposite films with the near infrared laser of 1550 nm wavelength where the optical absorption diminished enough for the generation of guided mode. The evolution of guided mode in the nanocomposite waveguide and its propagation properties were also evaluated. As an effective way of utilizing the surface plasmon resonance properties for the application to optical switching devices, we employed an attenuated total internal reflection type optical switch geometry and tested its effectiveness for the absorptive opto-functional materials system using a cross-modulation technique with 532-nm pump and 1550-nm probe beams. The index change probe beam experiences was found to be purely refractive in nature and negative in sign, presumably due to the photo-thermal effect induced in the nanocomposite film by the irradiation of pump beam. (C) 2008 Published by Elsevier B.V.