Quantum confinement effects on the optical properties of ion beam sputtered nickel oxide thin films are reported. Thin films with crystallite sizes in the range 9 to 14 nm have been deposited on to fused silica substrates. There is an increase in band gap, from 3.4 to 3.9 eV, and a decrease in refractive index, from 2.4 to 1.6, with decrease in crystallite size, that can be attributed to quantum confinement effects. The effective mass approximation has been used to explain the observed behaviour in band gap variation.