An electrochromic (EC) thin film based on composite of tungsten oxide and Ag nanoparticles was prepared by physical vapor deposition (PVD) method. In this method, WO3 nanoparticles powder with uniform rate was deposited in vacuum on fluorine doped tin oxide (FTO) coated glass substrate. The Ag nanoparticles powder was utilized to decorate the surface of WO3 thin film by using PVD method. The EC thin film was annelid to inject the Ag nanoparticles into the surface of thin film. The EC nanocomposite thin film with the approximate thickness of 315 nm and smooth surface was obtained. EC properties of WO3–Ag thin film was investigated by cyclic voltammetry (CV) and the visible transmittance to compare the existence of Ag nanoparticles beside WO3 nanoparticles by PVD method. Also, the optical response and coloration efficiency (CE) of samples were investigated. In particular, a significant optical modulation (39.65% at 632.8 nm) and high CE (74.2 cm2/C at 632.8 nm) are achieved that are much better than thin film only composed of WO3.