The influence of Nd3+ ions was investigated on the precipitation and optical properties of PbS quantum dots (QDs) inside silicate glasses. The diameters of the PbS QDs decreased as the concentration of Nd3+ in the glass increased as evidenced by blue shifts in the absorption and photoluminescence spectra. Electron energy loss spectroscopy shows that Nd3+ ions exist preferentially inside the PbS nanocrystals rather than in the glass matrix. We postulate that Nd-O clusters are preserved during heat treatment and serve as nucleation sites for PbS crystals. No change in the local bonding scheme of the Nd3+ ions was observed following heat treatment.