Uniform nanowires of silver and gold inside the channels of MCM-41 were prepared by controlled reduction of their respective metal salts with sodium borohydride (NaBH4). Presence of nanowires of silver and gold in MCM-41 were confirmed by high angle X-ray diffraction (XRD) data (peaks between 2ϑ = 30 − 60°) and transmission electron microscopy (TEM) confirmed the diameter of the nanowires. Diameter of nanowires is found to be ∼ 2.8 nm which is coincident with channel diameter of MCM-41. Optical properties of these heterostructured materials Ag-MCM-41 and Au-MCM-41 reveals the presence of surface plasmon absorption peaks of silver and gold respectively, and the shift in the absorption bands are associated to agglomeration of clusters inside the channels. Room temperature photoluminescence spectra exhibits interesting optical properties as observed for direct band gap semiconductors. Non-linear optical properties (NLO) corresponding to second harmonic generation (SHG) values were also recorded for self supported films of these heterostructured materials. Enhanced optical non-linearity was found to be arising from a corresponding increase of local field near the surface plasmon resonance. Further enhancement in SHG was found with poling due to an induction of orientation order.