We have studied the optical properties of silicon quantum dots (QDs) embedded in a silicon oxide matrix using photoluminescence (PL) and time-resolved PL. A broad luminescence band is observed in the red region, in which the time evolution exhibits a stretched exponential decay. With increasing excitation intensity a significant saturation effect is observed. Direct electron-hole recombination is the dominant effect in the red band. A relatively narrow peak appears around 1.5 eV, which is attributed to the interface states overlapping with transition from the ground state of the silicon QDs. The saturation factor increases slowly with detection photon energy between 1.5 and 1.8 eV, which is attributed to the emission from zerophonon electron-hole recombination. At higher photon energies the significantly increased saturation factor suggests a different emission mechanism, most likely the defect states from silicon, silicon oxide or silicon rich oxide.