Y3Al5O12:Ce3+ (YAG:Ce3+) nanocrystals were synthesized in 1,4-butylene glycol (BG) with and without poly(ethylene glycol) (PEG) by the glycothermal method. The internal quantum efficiency of the photoluminescence (PL) corresponding to the 5d -> 4f transition of Ce3+ in the YAG:Ce3+ nanocrystal increased from 21.3 to 37.9% by addition of PEG, while no appreciable change in the primary particle size, the crystallite size, and the lattice distortion was recognized by transmission electron microscopy and X-ray diffractometry. The thermogravimetry-differential thermal analysis, Fourier transform infrared absorption spectroscopy and H-1 ->C-13 cross-polarization magic angle spinning nuclear magnetic resonance (CP-MAS NMR) confirmed the preferential coordination of PEG to the YAG:Ce3+ nanocrystal. Al-27 single-pulse excitation MAS NMR reveals that the ratio of the 4-fold coordination site to the 6-fold coordination site increased from 0.53 to 0.72 by addition of PEG. We conclude that the surface modification of the YAG:Ce3+ nanocrystal by PEG induces the surface passivation, the prevention of the oxidation of Ce3+ to Ce4+, the promotion of the incorporation of Ce3+ into YAG and the local structural rearrangement, resulting in the PL enhancement.