Sol-gel-derived films containing BaTiO3 crystallites have been grown on suitable substrates using a precursor composition in the system Li2O-BaO-TiO2. Silver particles of diameters in the range 4.9 to 16.2 nm have been synthesized within these films by ion exchange and reduction technique. Electrical resistivities are found to vary from ∼102 to 105 ohm-cm, depending on the silver particle diameter. A low activation energy, approximately a few millielectron volts, is found to characterize the electrical properties of most of the samples. A quantum size effect is invoked to explain the results.