A perturbative approach is used to study the AC response of nonlinear composite media, which obey a current-field relation of the form J = σ E + χ|E|2 E with components having nonlinear response at finite frequencies. For a sinusoidal applied field, we extend the local potential in terms of sinusoidal components at fundamental frequency and high-order harmonic frequencies to treat the nonlinear composites. For nonlinear composite media vith a low concentrations of spherical inclusions, we give the formulae of the nonlinear effective AC susceptibility χ*3ω at the third harmonic frequency.