Hydrophilic photopolymers with AA as the monomer are versatile materials for use as holographic recording media. It has demonstrated a possibility to improve the refractive index modulation by doping inorganic nanoparticles into the polymer matrix. But the agglomerate effect of inorganic nanoparticles always deteriorate the holographic storage characteristics of the inorganic nanoparticle dispersed photopolymer compound materials. monodisperse hydrophilic gold nanoparticles are fabricated by the method of sodium citrate reduction, and then were dispersed into the PVA/AA photopolymer. Our results indicate that citrate ions coated on the surface of gold nanoparticles can effectively prevent the agglomerate effect, so that the gold nanoparticles can uniformly dispersed in the sol-gel photopolymer. The permanent refractive index grating can be formed owing to a spatial distribution of the effective refractive index with periodically distributed nanoparticles and polymerized monomers during the holographic recording. Furthermore, the citrate ion modified gold nanoparticles and polymer chain can induce the formation of hydrogen bonds which can prevent the material from distortion and at the same time improve the stability of the material by the coordination effect of carboxylate. Therefore, the incorporation of gold nanoparticles leads to a significantly improvement in the holographic properties of the materials, so that the volume shrinkage during the holographic exposure can be well suppressed. Additionally, there exists the optimum concentration of gold nanoparticles, at which the maximum diffraction efficiency can be as high as 90% and the volume shrinkage can be reduced to 0.8%.