The wavelength dependence of the third-order nonlinear optical susceptibilities,&khgr;(3),of theAu:TiO2composite films with Au concentration varying from 15&percent; to 60&percent; (volume fraction), was measured by a degenerate four-wave mixing (DFWM) technique using a probe laser with a pulse width of 200 fs. It was found that, with the wavelength of the probe laser close to the surface plasmon resonance(∼680 nm),both the&khgr;(3)and the figure of merit,&khgr;(3)/&agr;(&agr; is optical absorption coefficient) were significantly enhanced. The maximum value of the&khgr;(3)was6×10−7 esuand occurred at an Au concentration of about 38&percent;. Femtosecond time-resolved DFWM measurements revealed that the response time of the optical nonlinearity in theAu:TiO2films is extremely fast. The time-resolved DFWM results suggest that the main physical mechanism involved in the optical nonlinearity inAu:TiO2films on the femtoseconds time scale is the interband electric–dipole transition, and the hot electron excitation only partially contributes to the&khgr;(3)on the femtosecond time scale and it becomes dominant only in the picosecond region. ©1998 American Institute of Physics.