A new class of photo-refractive (PR) composite materials based on poly(N-vinylcarbazole) (PVK) (co-) sensitized with nano-crystalline lithium niobate (LiNbO₃) is presented. The steady-state performance, as well as the kinetics of the photo-refractive grating formation, was investigated by degenerate four-wave mixing (DFWM) and twobeam-coupling (TBC) experiments. We found an optimum content of LiNbO₃ nano-particles of only 10⁻³ wt.%. Even at concentrations as low as 10⁻⁷ wt.% a notable effect of the nano-crystals was detected. This yields materials with improved PR performance compared to that of the standard PR polymer material sensitized by TNF only. The role of LiNbO₃ nano-particles is discussed in detail: The particles support generation and transport of the free-charge carriers. Furthermore, they increase the electron trap density.