We report on a study of the absorption spectra and third-order nonlinear optical properties of crystalline PdO thin¯lms, grown by oxidation of thin palladium¯lms deposited on a substrate. The spectra reveal an absorption peak at ¼ 480 nm, which grows and narrows signi¯cantly as the temperature is lowered to T ¼ 77 K. This behavior suggests an exciton nature of the peak. According to the position of the long wavelength absorption edge in the spectra, the bandgap of the material is E g ¼ 2:4 eV. Utilizing the techniques of degenerate four-wave mixing and Z-scan, using a pulsed laser radiation with a wavelength ¼ 532 nm and a pulse duration of p ¼ 9 ns, we determined the real part of the third-order nonlinear susceptibility of Re ð3Þ ¼ À1:6 Â 10 À4 esu. Possible nature of this high refractive nonlinearity is discussed.Keywords: Palladium oxide; nonlinear optical properties; nanosecond pulsed laser; refractive nonlinearity.One of the most important problems of modern materials science is the search for and development of new functional optical materials with large optical nonlinearities, in particular third-order nonlinearities, for applications in optical information systems. Recent studies have shown that most promising in this respect are nanostructured systems based on noble metals, 1-3 where the third-order nonlinear optical response is enhanced by localized surface plasmons. 4 Another class of promising nonlinear optical materials comprise low-dimensional structures of metal oxides. For instance, the work of Panda et al., 5 report e±cient second harmonic generation of femtosecond 800 nm laser pulses using ZnO nanorods, which implies a high second-order optical nonlinearity of these systems. Methods of synthesizing such systems and determining their linear optical properties are presented in Ref. 6. Zhang et al., 7 report on an investigation of third-order optical nonlinearity of carbon nanotubes distributed into a polymer matrix; these systems demonstrate third-order nonlinear susceptibility on the order of 10 À12 esu. Also promising are thin¯lms of transition 3d metal oxides