Phone: þ7 812 292 8924, Fax: þ7 812 247 1017Nanocomposites comprising metallic nanoparticles (MNPs) inside a semiconductor matrix are promising materials for plasmonics suggesting a new concept of light manipulation and generation. Optical properties of the nanocomposites are controlled by localized plasmons (Mie resonances) in the MNPs. The basic properties of the nanocomposites have been studied using InN/In with In clusters formed both spontaneously and by the periodic deposition of In insertions. In the specially designed nanocomposites, the spots of intense cathodoluminescence are strongly correlated with the agglomerations of the In MNPs due to plasmon-induced enhancement. Furthermore, a strong difference is discovered between the onsets of thermally detected absorption and photocurrent. This feature is a key to distinguish InN/In from pure InN. To simulate the plasmonic effects in the nanocomposites a model has been proposed, which considers the clusters as spheroids of random shapes and orientations. The calculated dependences are in reasonable agreement with obtained optical data.