NiO-silica nanocomposites with average diameter ranging from 2–40 nm were prepared by sol-gel method followed by the heat treatment varying from 400°C to 1000°C. The details of morphology and crystalline nature of all the as prepared samples were characterized by TEM, HRTEM, and XRD analysis. The planes obtained from SAED pattern supports the planes originated from XRD study. From the optical absorption study, it is revealed that the band gap energy of NiO can extensively be manipulated by composite formation with silica and the size variation of that nanocomposite. Absorption peak position varies almost linearly with the oxidation temperature of the samples. Photoluminescence spectroscopy reveals that NiO-silica nanocomposite, prepared at 600°C and below, shows strong emission at 3.62 eV, but the nanocomposites with bigger size greatly hinder the effect of selective emissivity.