Nanocrystalline aluminium magnesium spinel doped with europium ions powders were synthesized via modified Pechini method. The effect of synthesis conditions (calcination temperature and duration) on structural, morphological and luminescence properties of obtained nanopowders was studied. Both X-ray diffraction and Rietveld analysis showed that samples consist of only one crystalline phase – face-centred cubic spinel. The SEM and SLS analysis demonstrated that average particle size is about 50 nm. It was shown that the solubility limit of europium ions Eu³⁺ in MgAl₂O₄ nanocrystals depends on the calcination temperature. When europium is introduced into the aluminium magnesium spinel, the crystalline structure is disordered. It was found that unlike calcination temperature, duration of heat treatment does not affect powders properties. It was shown that strong structural and luminescence changes take place when calcination temperature is near 2/3 of MgAl₂O₄ melting temperature. The optimal conditions for synthesis nanopowders were determined as follows: Т₁=600 °С t₁=1.5 h, Т₂=850 °С t₂=2 h.