Ag-doped BaTiO3 nanocomposite films have been synthesized on MgO substrates by excimer laser deposition. X-ray diffraction was used to characterize the structure and crystallinity of the films. The Ag chemical band and concentrations in the composite films were determined by X-ray photoelectron spectroscopy. The optical absorption were measured in the range of 300 to 800 nm and the absorption peaks due to the surface plasmon resonance of Ag particles were observed. z-scan results showed that the films exhibited large optical nonlinearities and the signs of the nonlinear absorption, β, and nonlinear refractive index, n2, changed with the increase of Ag concentration. The mechanism of the enhanced optical nonlinearities in Ag: BaTiO3 films is discussed.