Thin films of Ag–PET nanocomposite were synthesized by a novel route of atom beam co-sputtering. The nanocomposites were characterized by UV–visible and IR absorption spectroscopy, Rutherford backscattering spectroscopy and transmission electron microscopy. The absorption spectra exhibit features suitable for applications as (i) absorber extending from the visible region to about 2400 nm in the infrared region and (ii) bandpass filter at 320 nm, useful for HeCd laser. The transmission electron microscopy observations indicate that the metal fraction is in the form of fractals.