In the present paper, Ag nanoparticles embedded bismuthate glass composite was prepared by using a novel thermo-chemical reduction method. Red shift of surface plasmon resonance (SPR) absorption of the Ag nanoparticles was observed by utilizing UV-visible absorption spectra. The Raman spectra evidenced the evolution of the structural units of the glass after introduction of Ag nanoparticles. Z-scan and optical Kerr shutter technique with femtosecond laser as excitation source was applied to investigate the third-order optical nonlinearities of the nanocomposite in near-infrared region. The results show that the silver-bismuthate nanocomposite possesses Kerr response in scale of sub-picosecond, and its nonlinear refraction γ was dramatically increased up to 29 times under the influences of hot electron effect and local field effect.