Optical limiting of nanosecond laser pulses at 532 nm has been observed in CdxAg1-xS semiconductor nanoparticles within organic solution of polymeric ionic aggregates. Both free-carrier absorption (FCA) and nonlinear scattering contribute to the optical limiting performance. The optical limiting response of CdS nanoparticles, in the diameter range of 2–9 nm, increases with the increase of particle size. It can be further increased by surface coating of the CdS particle with a thin layer of Ag2S or forming ternary CdxAg1-xS particle. The FCA cross sections of CdxAg1-xS solutions were estimated to be between 10-19 and 10-18 cm2, which are comparable with those of bulk semiconductors.