Colloidal solid-solution-like Au-Ag alloy nanoclusters of different compositions were synthesized through citrate reduction of mixed metal ions of low concentrations, without using any other protective or capping agents. Optical absorption of the alloy nanoclusters was studied both theoretically and experimentally. The position of the surface plasmon resonance (SPR) absorption band of the nanoclusters could be tuned from 419 nm to 521 nm through the variation of their composition. Considering effective dielectric constant of the alloy, optical absorption spectra for the nanoclusters were calculated using Mie theory, and compared with the experimentally obtained spectra. Theoretically obtained optical spectra well resembled the experimental spectra when the true size distribution of the nanoparticles was considered. High-resolution transmission electron microscopy (HREM), high-angle annular dark field (HAADF) imaging, and energy dispersive spectroscopy (EDS) revealed the true alloy nature of the nanoparticles with nominal composition being preserved. The synthesis technique can be extended to other bimetallic alloy nanoclusters containing Ag.