(Eu_0.045Li_3xLu_y)₂O₃ nanocrystals are prepared by the precipitation method. The X-ray diffraction, Fourier transform infrared spectra, scanning electron microscopic images and transmission electron microscopic images are used to analyze the microstructure and morphology of the nanocrystals. To analyze the luminescence properties, the excitation spectra, emission spectra and luminescence decay curves of the samples are measured. The influence of precipitation agent, solvent, temperature, annealing condition and other factors on the microstructure, luminescence properties, fluorescence decay and energy level lifetime for (Eu_0.045Li_3xLu_y)₂O₃ nanocrystals is researched. The results show that the luminous intensity of the (Eu_0.045Li_3x=0.015Lu_y=0.94)₂O₃ nanocrystals precipitated in ammonia by adding lithium carbonate into the precursor powder and after calcination in activated carbon at 1000 ℃ increases by about twice compared with the sample which is prepared without lithium carbonate added, and increases by about four times compared with the sample calcined in air at 800 ℃.