Abstract : The research under this contract has been directed mainly toward the understanding of the optical behavior of those composite materials whose components are separated on a scale that is very small ( 100 A) compared with the wavelength of light. In the course of this work two types of new materials have been developed: (1) semiconductor-insulator composites which may be valuable as selective absorbers of solar radiation in solar thermal applications; and (2) electrochromic cermets which may have applications in a variety of display devices. Comparison of the predictions of two theories -- the Maxwell-Garnett theory (MG) and the effective-medium theory -- with the observed optical behavior of cermets formed by cosputtering a metal and an insulator clearly favored the MG theory. The optical properties of most Au, Ag, and W cermets were at least qualitatively described by MG, and good quantitative agreement could be obtained in most cases by modifying the published values of the optical constants of the metals to take into account the very short electron-scattering times found in the cermets. The most notable exception was Au-MgO, which did not exhibit the dielectric anomaly observed in most other Au cermets at wavelengths accurately predicted by MG. In the case of Au-MgO it was felt that observed surface texturing was dominating its optical behavior.