The optical properties of metal nanoparticles, particularly their localized surface plasmon effects, are well established. These plasmonic nanoparticles can respond to their surroundings or even influence the optical processes (for example, absorption, fluorescence and Raman scattering) of molecules located at their surface. As a result, plasmonic nanoparticles have been developed for multiple purposes, ranging from the detection of chemicals and biological molecules to light-harvesting enhancement in solar cells. By dispersing the nanoparticles in polymers and creating a hybrid material, the robustness, responsiveness and flexibility of the system are enhanced while preserving the intrinsic properties of the nanoparticles. In this Review, we discuss the fabrication and applications of plasmonic polymer nanocomposites, focusing on applications in optical data storage, sensing and imaging and photothermal gels for in vivo therapy. Within the nanocomposites, the nanoporosity of the matrix, the overall mechanical stability and the dispersion of the nanoparticles are important parameters for achieving the best performance. In the future, translation of these materials into commercial products rests on the ability to scale up the production of plasmonic polymer nanocomposites with tailored optical features.