Ce(3+)-doped yttrium aluminum garnet (YAG:Ce) nanocrystals were successfully synthesized via a facile sol-gel method. Multiple characterization techniques were employed to study the structure, morphology, composition and photoluminescence properties of YAG:Ce nanophosphors. The YAG:Ce0.0055 sintered at 1030 °C exhibited a typical 5d(1)-4f(1) emission band with the maximum peak located at 525 nm, and owned a short fluorescence lifetime τ1 (~28 ns) and a long fluorescence lifetime τ2 (~94 ns). Calcination temperature and Ce(3+) doping concentration have significant effects on the photoluminescence properties of the YAG:Ce nanophosphors. The emission intensity was enhanced as the calcination temperature increased from 830 to 1030 °C, but decreased dramatically with the increase of Ce(3+) doping concentration from 0.55 to 5.50 at.% due to the concentration quenching. By optimizing the synthesized condition, the strongest photoluminescence emission intensity was achieved at 1030 °C with Ce(3+) concentration of 0.55 at.%.