Silver/polyaniline-dinonylnaphthalene disulfonic acid (PANI-DNNDSA) gel nanocomposites are prepared from the reduction of silver salt by polyaniline in formic acid medium. Scanning electron micrographs (SEM) indicate the presence of three-dimensional fibrillar network structure and the silver nanoparticles remain dispersed within the PANI-DNNDSA fibrillar network. Differential scanning calorimetric (DSC) study shows reversible first-order phase transition characterizing the composite to behave as a thermoreversible gel. Transmission electron micrographs (TEM) show a decrease of nanoparticle size with increasing AgNO3 concentration. Wide angle X-ray scattering (WAXS) patterns show lamellar structure in the gel as well as in the gel metal nanocomposites (GMNCs) and the two melting peaks in the DSC patterns correspond to the melting of monolayer and bilayer crystals produced from the interdigitation of DNNDSA tails anchored from PANI chains within the PANI lamella. The above melting points are greater in the GMNCs than that of pure gel indicating the formation of complex melting thermogram with crystallites produced from the anchored surfactants tails at the surface of Ag nanoparticles. The GMNCs show a higher thermal stability than that of pure PANI-DNNDSA gel. PANI-DNNDSA gel has an emission peak at 354 nm but fluorescence quenching occurs in the GMNCs and the emission peak becomes red shifted. Also in the UV–vis spectra the π band-polaron band transition peak shows a red shift and the DC conductivity increases with increasing Ag nanoparticle concentration in the GMNCs. The current (I)–voltage (V) characteristic curves indicate Ohmic nature of conductivity of the gel and the current at the same voltage increases appreciably with increasing Ag nanoparticle concentration. These GMNCs are easily processible due to its thermoreversible nature. So, an easily processible, thermally stable and highly conducting DNNDSA-doped PANI-Ag gel nanocomposite with interesting photoluminescent property has been successfully developed suitable for optoelectronic applications. POLYM. ENG. SCI., 2010. © 2009 Society of Plastics Engineers