Neodymium-doped yttrium aluminum garnet (Nd:YAG) nanopowders were synthesized by the carbonate coprecipitation method. The effects of freeze drying and conventional oven drying of the precursor on the agglomeration of the Nd:YAG nanopowders were compared. The optical properties of the Nd:YAG nanopowders and the corresponding sintered Nd:YAG transparent ceramics were also investigated. The Nd:YAG nanopowders synthesized from freeze-dried precursor showed better dispersion and narrower particle size distribution compared with the powders synthesized from conventional oven drying. As a result, the Nd:YAG nanopowders synthesized from freeze-dried precursor have good sinterability, and Nd:YAG transparent ceramics were fabricated by vacuum sintering at 1750 degrees C for 5 h.