The authors present a study of the optical and magneto-optical properties of Co nanoparticles embedded in two amorphous dielectric matrices with different refractive indices such as ZrO2 and Al2O3. The nanostructured films were prepared by pulsed laser deposition, and the morphology and structure were studied by different characterization techniques. The optical and magneto-optical (MO) properties of the Co inside the nanoparticles differ from those of the bulk material; in particular, a decrease in the MO constants is found. These properties are found to depend on the nanoparticle size and on the dielectric matrix, due to the different nanoparticle-matrix interfaces appearing in both cases.