A facile sol-gel procedure has been developed for the synthesis of colloidal alumina nanocrystals. For the first time, optical characterization procedures were employed to study the quantum confinement effects in optical properties of the prepared Al2O3 sol. Accordingly, the hyperbolic band model was used to determine the optical band gap of colloidal alumina nanocrystals. X-Ray diffraction pattern was used to study the crystallographic phase of the dried gel. Morphological characterization was performed using scanning electron microscopy (SEM). Inductively Coupled Plasma (ICP) emission spectroscopy was used to determination purity of the Al2O3 powder. High-resolution TEM showed that the diameter of colloidal nanocrystals is about 10nm. Photoluminescence spectroscopy demonstrated that quantum yields for colloidal nanocrystals are 68% with 300nm excitation wavelength. The experimental observations confirm that highly stable alumina sol with strong UV emission was synthesized. The mentioned optical properties have not been reported before.