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<p>Abstract</p><p>Stable films containing CdS quantum dots of mean size 3.4 nm embedded in a solid host matrix are prepared using a room temperature chemical route of synthesis. CdS/synthetic glue nanocomposites are characterized using high resolution transmission electron microscopy, infrared spectroscopy, differential scanning calorimetry and thermogravimetric analysis. Significant blue shift from the bulk absorption edge is observed in optical absorption as well as photoacoustic spectra indicating strong quantum confinement. The exciton transitions are better resolved in photoacoustic spectroscopy compared to optical absorption spectroscopy. We assign the first four bands observed in photoacoustic spectroscopy to 1<it>s</it>_<it>e</it>&#8211;1<it>s</it>_<it>h</it>, 1<it>p</it>_<it>e</it>&#8211;1<it>p</it>_<it>h</it>, 1<it>d</it>_<it>e</it>&#8211;1<it>d</it>_<it>h</it>and 2<it>p</it>_<it>e</it>&#8211;2<it>p</it>_<it>h</it>transitions using a non interacting particle model. Nonlinear absorption studies are done using z-scan technique with nanosecond pulses in the off resonant regime. The origin of optical limiting is predominantly two photon absorption mechanism.</p>