Alternate ablation of metallic (Bi, Cu, Fe) and insulator (Al(2)O(3)) targets in vacuum have been used to produced nanocomposite films by pulsed laser deposition. The optical properties of the films are studied during growth by in situ reflectivity measurements, which are also used to control the process. The structure of the films is characterised by high resolution transmission electron microscopy. The results show that films with metallic nanocrystals 1.5-5.0 nm in diameter and high refractive index can be easily produced, the size and in-depth distribution being easily controlled through the number of pulses in the metallic and host targets, respectively. The growth mechanism, the role of an argon environment during growth, and the stability of the clusters upon annealing, are discussed. (C) 1998 Elsevier Science B.V.