With 800-nm, 120-fs laser pulses, optical nonlinearity has been studied in a series of thin films containing poly(methyl methacrylate) (PMMA), filled with surfactant acetylacetone (Acac) capped TiO2 nanoparticles, which were synthesized by a simple in situ sol-gel/polymerization process, assisted by spin coating and multi-step baking. The resulting nanohybrid thin films have highly optical transparency and demonstrate a unique nonlinear optical (NLO) response. The highest nonlinear refractive index (n(2)) is observed up to 6.55 x 10(-2) cm(2) GW (1) in the nanohybrid thin film of 60 wt% Ti(OBu)(4) in PMMA, with a negligible two-photon absorption (TPA), as confirmed by the Z-scan technique. The titanium precursor loading combined with the nature of the capping molecules are used to influence the ability of nanoparticles to nonlinear optical response. Indeed, the ligands at the nanoparticles' surface can not only control the extent of the interaction between the organicmolecules and the embedded nanoparticles but also influence the optical nonlinearities of nanoparticles. (C) 2009 Elsevier B. V. All rights reserved.