Solution-casting was used to create films of polyvinyl alcohol (PVA) nanocomposite containing different concentrations of Fe₃O₄@SiO₂ nanoparticles (NPs). The co-precipitation technique was used to synthesize Fe₃O₄@SiO₂ NPs. Fe₃O₄@SiO₂ impact on the PVA structure was investigated via X-ray diffraction (XRD), optical microscope, and Fourier transform-infrared (FT-IR) techniques. XRD reveals the destruction of the PVA semi-crystallinity with the Fe₃O₄@SiO₂ additive. FT-IR analysis supported hydrogen bond formation between PVA molecules and the Fe₃O₄@SiO₂ surface. The UV–visible spectrophotometer was used to investigate the optical parameters. The optical bandgap decreased with increasing the Fe₃O₄@SiO₂ concentration in the PVA matrix. Based on the optical bandgap, the theoretical linear refractive index (n) was deduced with theoretical models. The enhancement in the nonlinear refractive index and nonlinear optical susceptibility with the Fe₃O₄@SiO₂ additive to the PVA matrix makes it a possible material for nonlinear optical devices.