Hydrogenated and unhydrogenated Si-nanocrystal/Si dioxide (Si-nc/SiO<formula formulatype="inline"><tex> $_{2}$</tex></formula>) composites were obtained from Si<formula formulatype="inline"><tex>$_{y}$</tex></formula>O <formula formulatype="inline"><tex>$_{1-y} (y = 0.36, 0.42)$</tex></formula> thin films deposited by plasma-enhanced chemical vapor deposition. The unhydrogenated composites were fabricated by promoting the Si precipitation through the thermal annealing of the films in the flowing pure Ar at temperatures up to 1100<formula formulatype="inline"><tex> $^{circ}$</tex></formula>C. The hydrogenated composites were obtained from identical films by replacing the Ar with <formula formulatype="inline"><tex>$(hbox{Ar} + 5hbox{%} hbox{H}_{2})$</tex></formula> in the annealing step. The photoluminescence (PL) of the composites was studied as a function of the annealing temperature <formula formulatype="inline"><tex>$(T)$</tex></formula>, annealing time, and pump laser power. The PL intensity increases with increasing annealing temperature and time; however, it increases faster and attains several hundreds percent larger values when the annealing is performed under <formula formulatype="inline"><tex>$(hbox{Ar} + 5hbox{%} hbox{H}_{2})$</tex></formula> as compared to the annealing under pure Ar. Fourier-transform infrared spectra show that H in these hydrogenated samples incorporates mainly as Si–H bonds. The dependence of the PL spectra on <formula formulatype="inline"><tex>$y, T$</tex></formula>, and laser power are consistent with the assumption that light emission in both the hydrogenated and unhydrogenated Si-nc/SiO<formula formulatype="inline"><tex> $_{2}$</t- ex></formula> composites originates from the bandgap transitions involving the electron quantum confinement in the Si-ncs. The PL spectra from the hydrogenated films are skewed to the red as compared to those from the unhydrogenated ones. The bulk of the data indicates that H passivates the nonradiative recombination centers, most probably Si dangling bonds in disordered Si-nc/SiO<formula formulatype="inline"><tex>$_{2}$</tex></formula> regions, thus increasing the number of Si-ncs that contribute to the PL and modifying the distribution of the emission wavelengths.