In this paper a novel in-situ microwave-induced synthesis of the gold-polydimethylsiloxane nanocomposite is presented. Microwave-induced synthesis has the advantages of a very short reaction time, small particle size and narrow size distribution of the particles. The ethanol solution of gold chloroauric acid is used as the precursor solution. The mechanism of formation and growth of nanoparticles are discussed in detail. UV/Vis spectroscopy and SEM imaging were used to characterize the optical properties and the size distribution of the particles. To improve the sensing properties of the nanocomposite, an annealing process were used. The results show that the annealed samples have the high sensitivity of 102 nm/RIU toward the surrounding medium which makes the nanocomposite suitable for biosensing applications. In addition, the elasticity of the platform in the presence of gold nanoparticles was found to be enhanced up to 20%. Finally, the immunosensing of the bovine growth hormone was performed by using the localized surface plasmon resonance (LSPR) band of gold nanoparticles. The results demonstrate suitability of the nanocomposite platform for biosensing applications. The results are highly relevant for microfluidic-based biosensors.