The surface plasmon damping induced by high excitation of the electron
gas is studied in femtosecond pump-and-probe experiments on gold coll
oids embedded in a sol-gel matrix. Optical excitation of single-partic
le interband transitions leads to a pronounced broadening of the surfa
ce plasmon line. A similar behavior is observed For resonant excitatio
n of the surface plasmon. This broadening is the dominant optical nonl
inearity of the system, and reflects the excitation-induced damping of
the surface plasmon resonance. The time evolution of the damping rate
follows that of the electronic scattering rate.