Materials engineering at the nanometre scale should provide smaller technological devices than are currently available(1,2). In particular, research on semiconductor nanostructures with size-dependent optical and electronic properties is motivated by potential applications which include quantum-dot lasers and high-speed nonlinear optical switches(3,4). Here we describe an approach for controlling the size, orientation and lattice structure of semiconductor nanocrystals embedded in a transparent matrix. We form nanocrystalline precipitates by implanting ions of the semiconductor into a single-crystal alumina substrate and applying thermal annealing(5-7). Control over the microstructure of the nanocrystals is achieved using substrate amorphization and recrystallization. In essence, the substrate microstructure is manipulated using ion beams to induce changes in impurity solubility, crystal symmetry and cation bonding, which exert a profound influence on the microstructure of the embedded precipitates-a concept familiar in metallurgy(8). This approach can be extended to exercise control over virtually any type of precipitate (such as metals, insulators or magnetic clusters) as well as epitaxial thin films.