In this work, we report on Nd³⁺-doped Y₂O₃ nanocrystalline powders synthesized by standard Pechini and combined Pechini-foaming method. The structural and luminescence properties of nanocrystalline powders were studied using XRD, SEM, Raman and photoluminescence spectroscopy. Doping concentration effect on the luminescence intensity and lifetime of Y₂O₃:Nd³⁺ nanophosphors was investigated in detail. The optimum doping concentration of Nd³⁺ ions in yttria host was determined to be 1 at.%. Steady-state and kinetics photoluminescence properties of starting nanocrystalline powder and ceramics obtained with hot pressing were measured and discussed.