Thin films of silver (Ag)/polyethylene-oxide (PEO) nanocomposite were fabricated by a co-deposition of Ag sputtering particles and PEO thin film on substrates using a planar magnetron sputtering system. The PEO were polymerized from the monomer ethyl glycol dimethyl ether in the magnetron sputtering (MS) plasma. The nanocomposites were characterized by using UV-visible spectroscopy, X-ray photoelectron spectroscopy (XPS), X-ray diffraction (XRD) and atomic force microscopy (AFM). The correlation was performed between the concentrations of Ag and functional group density in Ag/PEO nanocomposites with the discharge parameters, such as sputtering gas pressure and the distance of target-to-substrate. By using AFM and XRD, it is illustrated that the Ag particles distribute uniformly in the body of nanocomposite and remain in atomic status with preferential growth in facet of (111).