Nonlinear optical properties of colloidal Au and poly(vinylpyrrolidone) (PVP) composite films were investigated using the Z-scan technique with 25 ps pulses at 532 nm near the surface plasmon resonance frequency of Au nanoparticles. Experimental results show large optical nonlinearities of the composite films with the real and imaginary parts of the third-order nonlinear optical susceptibility χ (3) being 4.7 × 10 −10 esu and 2.5 × 10 −10 esu, respectively. The obtained χ (3) value of Au/PVP composite films is comparable or higher than that of the organometallic complexes reported. Furthermore, a strong optical limiting response was observed and a possible application of the composite films as an optical limiter of picosecond laser pulses was discussed.