Using a Z-scan technique, we report size-dependent changeover from reverse saturable absorption to saturable nonlinear optical absorption properties of as-deposited and annealed stannic oxide semiconductor quantum dot thin films, prepared by a sol-gel technique on a quartz substrate. The average size of quantum dots, as obtained from grazing incident x-ray diffraction, was found to be in the range of the exciton Bohr radius. Atomic force microscopy data confirmed the spherical shape of quantum dots. The UV-Vis data of the films displayed bandgap enhancement due to the combined effect of Coulombic and confinement potentials. A density matrix analysis was conducted to obtain the transition energy-dependent nonlinear optical absorption coefficient in the
cw
excitation regime. We found a qualitative agreement between the experimental observations and theoretical calculations.