We have studied photoluminescence (PL) properties of Ga+ and As+ implanted SiO2 films on Si substrate. After thermal annealing, zinc blende GaAs nanocrystals are formed in SiO2 films and several PL bands appear in the red and near-infrared spectral region. Defects and impurities in GaAs nanocrystals and SiO2 cause weak luminescence in the near-infrared spectral region at low temperatures. After low-energy deuterium implantation, the defect PL intensity decreases and the red PL from GaAs nanocrystals is clearly observed. It is demonstrated that GaAs/SiO2 nanocompostites with low defect density are fabricated by sequential ion implantation followed by thermal annealing and hydrogen passivation. (C) 1999 American Institute of Physics. [S0021-8979(99)00215-7].