Laser ablation technique is employed in order to generate polydimethylsiloxane (PDMS)/Ag NPs in situ, starting from a silver target in a solution of PDMS prepolymer and toluene. The produced surfactant-free nanoparticles are characterized by high resolution transmission electron microscopy (HRTEM) and scanning TEM-high angle annular dark field (STEM-HAADF) imaging modes, showing the majority of them to be of the order of 4 nm in diameter with a small percentage of larger Ag-AgCl multidomain NPs, embedded into a PDMS matrix. Low concentrations of carbon onion-like nanoparticles or larger fibers are also formed in the toluene-PDMS prepolymer solution. In accordance with this, UV-vis spectra shows no peak from silver NPs; their small size and their coverage by the PDMS matrix suppresses the signal of surface plasmon absorption. Inductively coupled plasma measurements reveal that the concentration of silver in the polymer is characteristically low, ~0.001% by weight. The electrical properties of the PDMS nanocomposite films are modified, with current versus voltage (I-V) measurements showing a low current of up to a few tenths of a pA at 5 V. The surface resistivity of the films is found to be up to ~10(10) Ω/sq. Under pressure (e.g. stress) applied by a dynamic mechanical analyzer (DMA), the I-V measurements demonstrate the current decreasing during the elastic deformation, and increasing during the plastic deformation.