Composites of thermally sensitive hydrogels and optically active nanoparticles have been developed for the purpose of photothermally modulated drug delivery. Copolymers of N-isopropylacrylamide (NIPAAm) and acrylamide (AAm) exhibit a lower critical solution temperature (LCST) that is slightly above body temperature. When the temperature of the copolymer exceeds the LCST, the hydrogel collapses, causing a burst release of any soluble material held within the hydrogel matrix. Gold-gold sulfide nanoshells, a new class of nanoparticles designed to strongly absorb near-infrared light, have been incorporated into poly(NIPAAm-co-AAm) hydrogels for the purpose of initiating a temperature change with light; light at wavelengths between 800 and 1200 nm is transmitted through tissue with relatively little attenuation, absorbed by the nanoparticles, and converted to heat. Significantly enhanced drug release from composite hydrogels has been achieved in response to irradiation by light at 1064 nm. We have investigated the release of methylene blue and proteins of varying molecular weight. Additionally, the nanoshell-composite hydrogels can release multiple bursts of protein in response to repeated near-IR irradiation.