Nd:YAG nanoscaled powders were prepared by the co-precipitation method with Nd2O3, Y2O3 and Al(NO3)3?9H2O as the starting materials and CO(NH2)2 as the precipitator. The structure and morphology of the powders were investigated by XRD, TG-DTA, FESEM and laser particle analyzer. XRD patterns show that YAG phase and intermediate phase YAM were detected in the sample from the precursor calcined at 900 ℃ for 3 hours, the precursor completely transformed to YAG phase when it was calcined at 1000 ℃ for 3 hours, and the intensity of YAG X-ray diffraction peaks increased with the increase of calcination temperature. Lattice parameters of Nd:YAG phase calcined at 900 ℃~1200 ℃ changed from 1.2012 nm to 1.1994 nm, and the particle size ranged from 31~96 nm. The similar variation was given by a measure of laser particle analyzer. The TG-DTA results indicate that the mass loss value was about 43% when the precursor was heated up to 1200 ℃. Suspension was washed with distilled water and alcohol, respectively. The comparison results show that alcohol is more effective for the well-dispersion of the nano-sized Nd:YAG powders. The results provid references for preparing good powders of YAG transparent ceramics.