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Abstract Photonic integrated circuits require various optical materials with versatile optical properties and easy on‐chip device integration. To address such needs, a well‐designed nanoscale metal‐oxide metamaterial, that is, plasmonic Au nanoparticles embedded in nonlinear LiNbO₃(LNO) matrix, is demonstrated with tailorable optical response. Specifically, epitaxial and single‐domain LNO thin films with tailored Au nanoparticle morphologies (i.e., various nanoparticle sizes and densities), are grown by a pulsed laser deposition method. The optical measurement presents obvious surface plasmon resonance and dramatically varied complex dielectric function because of the embedded Au nanoparticles, and its response can be well tailored by varying the size and density of Au nanoparticles. An optical waveguide structure based on the thin film stacks of a‐Si on SiO₂/Au‐LNO is fabricated and exhibits low optical dispersion with an optimized evanescent field staying in the LNO‐Au active layer. The hybrid Au‐LNO metamaterial thin films provide a novel platform for tunable optical materials and their future on‐chip integrations in photonic‐based integrated circuits.