Eu³⁺-doped MgAl₂O₄ nanoparticles were prepared by modified Pechini method. X-ray diffraction analysis shows pure tetragonal spinel phase without any impurities. The average size of synthesized nanoparticles was determined to be about 50–60 nm using scanning electron microscopy and static light scattering techniques. Emission and excitation spectra as well as lifetimes of MgAl₂O₄:Eu³⁺ nanophosphors were explored in surrounding media with different refractive indexes. Surrounding medium does not affect luminescence bands position, whereas ⁵D₀ lifetime monotonically decreases along with increase of medium refractive index. Effect of surrounding media on radiative and nonradiative decay rates, which were calculated using 4f–4f intensity theory, was studied and discussed. Filling factor of prepared nanoparticles is defined using both radiative and observed lifetimes.