Highly efficient yttrium oxide doped with trivalent europium (Y2O3:Eu) phosphor was prepared through precursors synthesized by hydrothermal method. Crystalline precursors, namely europium-doped yttrium carbonate (Y-2(CO3)(3)center dot 2H(2)O:Eu) and europium-doped yttrium hydroxy carbonate (Y(OH)CO3:Eu), were prepared by varying the concentration of yttrium to europium ions and urea in the reaction mixture. The precursor materials on annealing at 700 degrees C gave nanocrystalline Y2O3: Eu, which was further processed at high temperatures in the absence and presence of sintering aid to yield phosphor materials with varying crystallite size and morphology. The precursors and phosphor material were characterized using FTIR, TGA, powder XRD, SEM, TEM, and photoluminescence (PL) spectral studies. The emission efficiency was found to depend on the crystallite size, morphology, and particle size of the phosphor materials. It was observed that phosphor material with spherical morphology and particle size of 0.5-1.0 mu m with crystallite size of 100 nm has the highest PL efficiency.