Composite films with nanoscale Au particles uniformly embedded in BaTiO3 matrices (Au-BaTiO3) were prepared by using pulsed laser deposition (PLD) technique. High-resolution transmission electron microscope (TEM) and X-ray photoelectron spectroscope (XPS) were used to characterize the films. It could be seen from the TEM micrographs that the film exhibited a very homogeneous distribution of spherical Au particles. The diameter of the Au particles was estimated to be 2～3 nm. The X-ray photoelectron core-level spectra of Ba3d, Ti2p and Au4f lines were presented and suggested the films were composed of metal Au embedded BaTiO3 matrix. The optical absorption of the films was measured in the wavelength range of 330～800 nm, and the absorption peak due to the surface plasmon resonance of Au particles was found around 500 nm. The third-order optical nonlinearity of the composite films was investigated by the Z-scan method using a Q-switched Nd:YAG laser with a wavelength of 532 nm and a pulse width of 10 ns. The nonlinear refractive index n2 and the nonlinear absorption coefficient β were determined to be -2.42×10-6 esu and 2.22×10-6 m/W, which showed that the Au-BaTiO3 thin films had a large nonlinear optical susceptibility.