Nanocomposites of x wt % MoO3/α-NiMoO4 (x = 0.0, 1.3, 6, 16, and 60) were prepared using a hydrothermal approach. The synchrotron X-ray diffraction (XRD) patterns measured were analyzed applying the Rietveld refinement method to identify and quantify the phases formed in each sample. The variation in crystallite size, lattice parameters, and phase percentage for each formed phase in the nanocomposites was determined. Further characterization of the nanocomposites was performed utilizing Fourier transform infrared spectroscopy (FTIR) and Raman spectra confirming the formation of MoO3/α-NiMoO4 heterostructures. UV–Vis–NIR diffuse reflectance measurements revealed three distinctive absorption bands ascribed to a ligand-to-metal charge transfer (O2⁻ → Mo6+) and the spin-allowed d–d transitions taking place within the Ni-octahedra ions. All samples exhibited nearly identical reflectance and absorbance characteristics within the UV–Vis range of 300–730 nm; however, in the near-infrared region (λ > 750 nm), the absorbance exhibited an increasing trend correlating positively with the amount of MoO3 in the composite. The optical band gap of α-NiMoO4 is 2.995 eV and varied non-monotonically with MoO3 percent (x); it is reduced for x ≤ 6 and increased for higher values of (x). Different empirical models were applied to find out the refractive index of each sample. The nanocomposite with x = 1.3% exhibited the highest refractive index (2.48) and nonlinear optical parameters. The PL intensity was enhanced due to the higher absorption and more oxygen vacancies that improve the gas sensing reaction. The samples revealed cyan green colors depending on the amount of MoO3 in the nanocomposites.