Composite thin films Au:BaTiO3, comprising nanometer-sized gold particles embedded in barium titanate matrices, were synthesized on MgO (100) substrates with the pulsed laser deposition technique. The nanostructure of the films and the size distributions of the Au particles were analyzed by high-resolution transmission electron microscopy. Crystal lattice fringes from the Au nanocrystals and the BaTiO3 matrices were observed. The nonlinear optical properties of the Au:BaTiO3 films were measured with the z-scan method at a wavelength of 532 nm, which was closed to the surface plasmon resonance of nanoscale Au particles. The features of the closed-aperture z-scan transmittance curves were affected by the ratio, which increased greatly at a high metal concentration, of the imaginary part to the real part of the third-order nonlinear susceptibility chi(3).