Copyright © 2019 American Chemical Society. Controlling the formation of nanoparticles (NPs) by direct laser writing ensures an efficient way of engineering the optical responses of nanocomposite materials through adjusting laser parameters such as power, focusing, and writing speed. The growth of NPs, photo-oxidation, and reduction affect the light absorption by an ensemble of laser-activated NPs. However, those self-consistent processes are not well understood. Previous studies explained the growth or shrinkage of silver NPs by neglecting heat diffusion. It remained unclear, however, how the NP size can be controlled by the laser writing speed. In this work, based on the coupled calculations of size variation, heat diffusion, and light absorption by an ensemble of NPs, we propose a two-dimensional model taking into account the spatial information of size and temperature. The spatial size distribution is revealed to be nonuniform, leading to the transmission inhomogeneity along the laser written lines. This fact is confirmed by the in situ transmission experiments. The performed study also depicts a novel view in which NPs grow ahead of the laser beam center because of the heat diffusion. The nonlinear growth never stops until it exhausts the majority of the free Ag0 in the matrix, while the amount of Ag0 by reduction cannot compensate the consumption. After that, the photo-oxidation dominates the process and finally controls the writing speed dependency of NP's size. The simulations also show that it is not the activation energy of Ag0 diffusion, but the ionization efficiency affects the final NP size, which helps to understand how to improve the laser processing of differently prepared samples.