Nonresonant third‐order harmonic generation from CdS clusters encapsulated in zeolite A and X was observed at a fundamental wavelength of 1900 nm. To avoid scattering from the surfaces of the small zeolite crystals, the powder samples were dispersed in a liquid with nearly the same refractive index as that of the samples. The third‐order optical susceptibilities of CdS‐encapsulated zeolite A and X estimated from the intensity of their Maker fringe patterns were 4.1×10−12and 1.1×10−11esu, respectively. These values were slightly smaller than those reported for the 1.5 nm surface‐capped CdS cluster. The hyperpolarizabilities of CdS clusters encapsulated in zeolite A and X were estimated by assuming the Lorentz local field to be in the range of 380–480×10−36and 270–390×10−36esu, respectively. ©1995 American Institute of Physics.