The zero‐dimensional metallic nanoparticles (NPs) have attracted tremendous attention in various areas owing to the collective oscillation of electron gas that couples with electromagnetic field, known as localized surface plasmon resonance (LSPR). In practical applications, the tailoring of LSPR effect is of significant importance for promising photonic devices with designed nanocomposite systems and enhanced optical properties. Ion beam technology has been demonstrated to be an efficient method to fabricate NPs embedded in dielectrics for LSPR tailoring and material modification. By manipulating the parameters of ion beams, the shape, size, and structure of NPs can be well controlled, which enables the dielectrics to possess novel linear and nonlinear optical properties. In this review, the latest research progress on the ion beam synthesis of various NPs is systematically summarized. The tailoring of linear and nonlinear optical properties of dielectrics by NPs is discussed in detail. Selected applications are presented to indicate the development of the plasmonic NPs in dielectric systems for photonic applications.