We have studied the effect of hydrogen dilution on the structural and optical properties of plasma-deposited amorphous hydrogenated carbon. Electron spin resonance reveals that the dangling bond density does not change with hydrogen dilution, presumably because there is an excess of hydrogen present during these depositions. Information from 13C NMR, however, shows that hydrogen dilution induces changes in composition, hydrogenation, sp
carbon bonding ratio, and the size of sp
bonded clusters. These changes modify the electronic band structure, as observed by shifts in optical measurements.