Colloidal solutions and redispersible powders of nanocrystalline, lanthanide-doped YVO4 have been prepared via a hydrothermal method at 200 degrees C. High-resolution transmission electron micrographs of size-selected samples show highly crystalline particles ranging in size from about 10 to 30 nm. The particles exhibit the tetragonal zircon structure known for bulk material. Upon UV excitation of the vanadate host, the energy is transferred to the lanthanide ion and strong luminescence (f-f transitions) is observed. By analyzing line splitting and intensity pattern in the luminescence spectrum of the europium-doped sample, we are able to verify that the dopant ions enter the same lattice site as in bulk material despite the nanocrystalline nature of the sample and the low-temperature synthesis. For YVO4:Eu nanoparticles a luminescence quantum yield of 15% at room-temperature was observed.