Silver nanocolloids stabilized with polyvinyl pyrrolidone (PVP) have been prepared from (AgNO3) by a chemical reduction method, involving the intermediate preparation of (Ag2O) colloidal dispersions in the presence of sodium dodecycle sulfate as a surfactant and formaldehyde as reducing agent. The molecules of PVP play an important role in growth and agglomeration of silver nanocolloids. The formation of Ag nanocolloids was studied from the UV-vis absorption characteristics. An energy dispersive X-ray (EDX) spectrum and X-ray diffraction peak of the nanoparticles showed the highly crystalline nature of silver structure. The particle size was found to be 40 nm as analyzed from Field emission scanning electron microscopy (FESEM). The nonlinear optical and optical limiting properties of these nanoparticle dispersions were studied by using the Z-scan technique at 532 nm. Experimental results show that the Ag nanocolloids possess strong optical limiting effect, originated from absorption saturation followed by two-photon mechanism. The data show that Ag nanocolloids have great potential for nonlinear optical devices. (C) 2012 Elsevier B. V. All rights reserved.