Silver nanoparticles dispersed in a silica matrix were made by the consolidation of a Ag-attached silica colloid, which was synthesized via the electrolysis of a pure Ag electrode, the reduction of Ag+ ions by H2, and the nucleation and growth of Ag particles on the silica nanoparticles in water. This simple process produced Ag/silica nanocomposites with a high concentration and narrow size distribution of nanoparticles, which was confirmed by transmission electron microscopy and x-ray diffraction. As estimated by Raman and photoluminescence measurements, the quantity of broken oxygen bonds was increased with increasing Ag concentration due to the intervention of Ag ions as structural modifiers in the silica network structure. Ag ions in the matrix are probably a residue of the Ag+ ions that could not be reduced by H2 during the electrolysis/reduction reaction. The optical-absorption spectra and the HCl-soaking test suggested that a chemical-interface damping effect, which was caused by electron transfer from the metal particles to the oxide matrix, dominates the optical-absorption properties in this system.