Structural and optical properties of Ag-glass nanocomposite, synthesized by the combined use of vacuum deposition method and subsequent thermal annealing have been studied using UV-Visible absorption spectroscopy, Field emission scanning electron microscopy (FE-SEM) along with Energy dispersive analysis of X-rays (EDAX), Transmission electron microscopy (TEM) and Photoluminescence spectroscopy. Ag-glass nanocomposites were synthesized by depositing Ag on glass slides and the resulting samples were annealed at various temperatures from 300°C to 550°C for 1 hour. The fingerprint feature of Ag nanoparticles formation i.e. the surface plasmon resonance peak is observed around 427 nm in absorption spectra of Ag-glass samples annealed at various temperatures, this confirms the formation of Ag nanoparticles in glass. The size of Ag nanoparticles has been found to increase with increase in annealing temperature. At an annealing temperature of 400°C the size of Ag nanoparticles comes out to be 4.6 nm which increases to a value of 10.0 nm at an annealing temperature of 550°C. TEM micrograph further confirms the formation of Ag nanoparticles of size 8 + 2 nm at an annealing temperature of 550°C. Further, analysis of UV-Visible absorption and reflection data indicates towards the increase in refractive index of Ag nanoparticles doped glasses. It has been established that with the insertion of Ag nanoparticles of size 8 + 2 in glass the refractive index of the resulting nanocomposite increases to a value of 1.96. The dispersion parameters such as single-oscillator energy Eo, and the dispersion energy Ed have been discussed in terms of the Wemple-DiDomenico single-oscillator model. Photoluminescence spectra of silver glass nanocomposite have been studied and observed spectroscopic features have been correlated with various transitions of silver ions. Such studies are vital for designing optical materials for example optical communication, photonic devices etc.