Ion beam bombardment causes damage to the crystalline structure of MgO which is observed by absorption photospectrometry by an increase in the optical absorption. Meanwhile, the implantation of metal ions into any photorefractive materials followed by thermal annealing leads to an increase in optical absorption for a narrow band of wavelengths. We have implanted MeV metal ions into MgO (100), changing its optical properties. These observed changes were accomplished by ion implantation followed by high temperature annealing. The size of the clusters was identified using absorption photospectrometry as well as using TEM. Using the Mic theory, we were able to confirm the formation of the nanoclusters '' quantum dots '' even before the TEM measurements. We show that these nanoclusters change important optical properties of MgO. (c) 2004 Elsevier B.V. All rights reserved.