In this paper, the concentration series of MgAl₂O₄:Nd³⁺ nanocrystalline powders have been synthesized by modified Pechini method. Neodymium doping concentration was varied within range of 0.05–5 ​at.%. The obtained samples have been analyzed using the various experimental methods: X-Ray diffraction, scanning electron microscopy, energy dispersive X-Ray spectroscopy, as well as steady-state and kinetics photoluminescence spectroscopy. According to XRD, all synthesized samples are monophasic without any structural impurities. The doping concentration effect on the luminescent characteristics of MgAl₂O₄:Nd³⁺ nanocrystalline particles has been studied in terms of emission intensity and lifetime. The optimal doping Nd³⁺ concentration was determined to be 0.1 ​at.%. Concentration quenching in MgAl₂O₄:Nd³⁺ powders occurred via energy transfer among the nearest neighbor ions. Performed studies shed the light on behavior of Nd³⁺ ions in nanoscale magnesium aluminum spinel.