Changes in the optical properties of single walled carbon nanotubes (SWNTs) caused by the encapsulation of molybdenum (Mo) clusters were investigated in the current research. Detailed transmission electron microscope observations showed that the encased Mo clusters within the hollow core of SWNTs exhibited in the form of short rod-like structure, indicating the growth of the clusters within the confined nano space. The upshifted G-band frequency as well as the quenched photoluminescence and absorption signals signified the modulation in the electronic properties of SWNTs caused by a strong coupling interaction between the nanotube and the Mo clusters.