Functional thin films of nanoscale metal pillars in oxide or nitride matrices known as vertically aligned nanocomposite (VAN) have gained much interest owing to their unique strain-coupled and highly anisotropic properties. So far, the deposition of these films has been explored mostly experimentally. In this work, a density functional theory (DFT)-based kinetic Monte Carlo simulation model using Bortz–Kalos–Lebowitz algorithm was developed to understand the growth of VAN films deposited by pulsed laser technique on mismatching substrates. The model has been parameterized and applied to understand the kinetics of growth thin films consisting of Au pillars in CeO2 matrix deposited on SrTiO3 substrates. The effects of pulsed laser deposition (PLD) conditions including the pulse frequency, deposition flux, and substrate temperature were explored. The simulations indicate that the Au pillar size and shape exhibit significant dependence on the PLD conditions. Namely, increasing the temperature increases the average pillar size and lowers the pillar density, and vice versa. In addition, the simulations revealed that increasing the deposition rate results in lowering the average pillar size and increasing the density. Particularly, the DFT results suggest that Au pillar size can be tuned during the initial growth of the first monolayer due to the significantly low activation barrier. Our analysis showed that the relationship between the average pillar size and pillar density is influenced by the kinetics. Furthermore, autocorrelation analysis showed that pillars self-organize in quasi-ordered patterns at certain windows of the deposition conditions, which is attributed to the complex nature of the chemical interactions in the system, the kinetics, and the deposition parameters.