We report a general method for incorporation of nanoparticles into polyelectrolyte multilayer (PEM) thin films by utilizing the excess charges and associated counterions present in the PEMs. Silver ions were introduced directly into multilayers assembled from poly(diallyldimethylammonium chloride) (PDDA) and poly(styrene sulfonate) (PSS), (PDDA/PSS)(n), by a rapid ion exchange process, which were then converted into silver nanoparticles via in situ reduction to create composite thin films. The size and the content of the nanoparticles in the film can be tuned by adjusting the ionic strength in the polyelectrolyte solutions used for the assembly. Spatial control over the distribution of the nanoparticles in the PEM was achieved via the use of multilayer heterostructure containing PDDA/PSS bilayer blocks assembled at different salt concentrations. Because excess charges and counterions are always present in any PEM, this approach can be applied to fabricate a wide variety of composite thin films based on electrostatic self-assembly.