Nanometre-sized gold particles embedded in BaTiO3 composite thin films (Au/BaTiO3) were fabricated by the pulsed laser deposition technique. The films were grown on MgO (100) substrates at 700°C. The crystalline property of the films was studied with x-ray diffraction. X-ray photoelectron spectroscopy was used to check the Au composition and chemical nature for the deposited films. The absorption peak due to the surface plasmon resonance of Au particles was observed at the wavelength of about 570 nm, which increased as the metal particle size was increased. The nonlinear optical properties of the Au/BaTiO3 films were determined using the z-scan method at the wavelength of 532 nm, which was close to the resonant frequency. The real and imaginary parts of the third-order nonlinear susceptibility X(3) at an Au concentration of about 6.7 at.% were determined to be 6.62× 10-7 esu and -6.24 × 10-s esu, respectively. The films showed a very large absorption, masking the nonlinear refraction effect at high metal concentrations.