CdTe films, Ag nanoparticles, and Ag/CdTe composites have been successfully fabricated on substrates by means of the physical vapor deposition (PVD) process. The morphological structure, crystal growth and band gap of the samples were specifically characterized by scanning electron microscopy(SEM), X‐ray diffractometerand(XRD) and UV‐Vis spectrophotometer. Picosecond (ps) Z‐scan technology was used to investigate the nonlinear optical(NLO) properties of the composites under 532 nm. The results indicated that all samples exhibited saturated absorption(SA) nonlinear absorption properties and self‐dispersion nonlinear refraction properties. In addition, Ag nanoparticles can improve the NLO properties of Ag/CdTe composites, and this improvement is more obvious with the increase of Ag power. The results showed that the excellent properties of the Ag/CdTe composites are expected to make them an ideal material for use in the photoelectric field.This article is protected by copyright. All rights reserved.