Effects of Ar-ion induced surface nanostructuring were studied using 100 keV Ar-ion irradiation of 30 nm Ag-Au bimetallic films deposited on Al 2 O 3 single crystals, under irradiation fluences ranging from 5.0 × 10 15 cm -2 to 6.3 × 10 16 cm -2 . Scanning electron microscope was used to study the ionbeam-induced surface nanostructuring. As the irradiation fluence increased, dewetting of the bimetallic films on the Al 2 O 3 substrate was observed, and formation of isolated Ag-Au nanostructures sustained on the substrate were obtained. Next, thermal annealing was performed under high vacuum at 1073 K for 2 hours; a layer of photosensitive Ag-Au alloy nanoballs partially embedded in the Al 2 O 3 substrate was obtained when higher fluence irradiation (> 3.8 × 10 16 cm -2 ) was used. The microstructures of the nanoballs were investigated using a transmission electron microscope, and the nanoballs were found to be single crystals with a FCC structure. In addition, photoabsorption spectra were measured, and localized surface plasmon resonance peaks were observed. With increase in the irradiation fluence, the size of the Ag-Au nanoballs on the substrate decreased, and a blue-shift of the LSPR peaks was observed. Further control of the LSPR frequency over a wide range was achieved by modifying the chemical components, and a red-shift of the LSPR peaks was observed as the Au concentration increased. In summary, ion irradiation is an effective approach toward surface nanostructuring, and the nanocomposites obtained have potential applications in optical devices.