Nanocomposite films comprising metal Cu nanocrystals embedded in an Al2O3 matrix were deposited by alternating pulsed laser ablation from metallic Cu and ceramic Al2O3 targets. The films were grown in vacuum on glass substrates held at room temperature. The as-grown films contain 4 nm Cu nanocrystals in an amorphous Al2O3 matrix, with a total thickness of 190 nm. The films show a substantial third-order susceptibility with an electronic nonlinear refractive index of (2.93±1.08)∙10-10 cm2 W-1 and a nonlinear saturation of -(2.34±0.18)∙10-5 cm W-1. © 1997 American Institute of Physics.