In this pa per, we reveal, for the fi rst ti me, the basic nature of electron-phonon interaction in semiconductor nanocrystals. On the basis of the experimental results on GaAs, GaP, Si nanocrystals, and porous silicon, we further prove that the carrier-induced dynamic strain effect (CIDSE) is a common feature in solids, wh ich plays an extremely im porta nt role on the electronic and optical properties of semiconductor nanocrystals. The optical transitions in semiconductor nanocrystals are dominated by multiphonon-assisted electronic transition processes. Nanocrystals with direct-gap and a large pressure coefficient for the ba nd gap (as GaAs) no longer show band-edge emission due to the intrinsic strong electron - long wavelength anharmonic acoustic phonon coupling. Nanocrystals with an indirect-gap show a carrier-induced dynamic Jahn-Teller effect and two fairly strong intrinsic emission bands. Most of the open questions in the semiconductor nanocrystal field, including porous silicon, can be consistently explained by the carrier-induced dynamic strained quantum dot model.