The structure of nanocrystalline Y2O3:Eu prepared by a combustion reaction was analyzed by XRD and high-resolution electron microscopy. Compared with a large-scale particles, 5-nm Y2O3:Eu particles presented as distorted crystallite and rough surfaces. Luminescent and absorption properties of nano-Y2O3:Eu showed remarkably particle size effects. At Y2O3:Eu particle sizes smaller than 10 nm some new results were observed: (a) a red shift of the charge-transfer-state absorption; (b) new emission bands of Eu3+ in the D-5(0) --> F-7(2) region; (c) luminescent decay of energy level D-5(0) of Eu3+ turning to a two-step exponential; and (d) a pronounced increase in quenching concentration and much lower phonon density compared with those of the bulk material. All these phenomena can be attributed to the effect of the softened lattice and surface state of the nanomaterial. The latter was confirmed by stronger excitation by the host absorption after the surface modification. (C) 2003 Elsevier Science (USA). All rights reserved.