In the current work, CuI nanoparticles (NPS) were synthesized at low temperatures via facile microwave-assisted technique, while the casting method was used to prepare nanocomposite systems. The structure of NPS powder and nanocomposites films were examined by XRD (Diffraction of X-ray) and EDAX spectra (Energy Dispersive Analysis of X-ray). The particle size and the sample’s morphology were studied by HR-TEM and SEM (Scanning electron microscopy). DTA (Differential thermal analysis) study shows that the thermal stability of CuI(NPS)/ PVOH nanocomposites higher than that of pure PVOH film. The band-tail and bandgap energy were influenced by the CuI(NPS) percentage in the PVOH matrix. The improvement in the linear optical parameters such as absorption index, dielectric constant, and refractive index are noticed with raising the doping ratio. The refractive index (n) was calculated as a function of the energy gap by different formulas. The average value of n increased from 2.06 to 2.15 with increasing the NPS percentage. The nonlinear optical parameters χ(1), χ(3) and n2 are varying in the range of 0.258 e.s.u to 0.291 e.s.u, 0.762 × 10–12 e.s.u to 1.225 × 10–12 e.s.u, and 1.39 × 10− 11 e.s.u to 2.14 × 10− 11 e.s.u, respectively. Moreover, the dielectric constant (ε∞) varies from 4.25 to 4.66. The ability of the present samples to decrease the laser beams power, with wavelengths 632.8 nm and 533 nm, was detected. The enhancement in the optical properties of the nanocomposites with increasing the CuI(NPS) concentration recommends that the synthesized systems are suitable for commercial optical cut-off and various optical device applications.