Materials are always the first power of our science and technology. In this paper, we explored the linear and nonlinear optical responses of silver/bismuth oxide composite thin films, with special emphasis on the relation between the third-order nonlinear optical susceptibility and the metal composition and metal particle size. The intrinsic optical properties of Ag:Bi$_{2}$O$_{3}$ composite films are revealed for the first time by our research. The maximum value of the third-order optical susceptibility $chi ^{(3)}$ was $4.1~ imes~10^{-10}$ esu, which occurred at a 35.7 \% Ag concentration.With increasing annealing temperature, the maximum value of $chi ^{(3)}$observed was 2.1$~ imes~10^{-9}$ esu, which occurred after heat treatment at 600 $^circ$C. We also studied the structure and the crystallinity of the samples by using X-ray diffraction and atomic force microscope techniques before and after annealing. Based on the femtosecond nanoswitch effect we revealed, the Ag:Bi$_{2}$O$_{3}$ composite materials have promising potential applications in next generation communication technology.