The concentration quenching of fluorescence and Nd3+ ion-ion interaction in NdxY1-xPO4 crystals were investigated by laser-excited time-resolved site-selective spectroscopy techniques. Results showed that the concentration quenching in such crystal is stronger than that in NdxY1-xPO4, and the quenching rate has a linear dependence on x2. The time-resolved site-selective spectra suggested that the Nd3+ iona occupy a variety of nonequivalent crystal-field sites in Nd0.03Y0.97PO4. From the dependence of site-selective spectra on time and temperature, it is believed that energy transfers between Nd3+ ions in nonequivalent crystal-field sites occur via two-phonon-assisted processes with, a resonant energy of 117 cm-1, an energy transfer rate ωs=2.7×104 s-1, a room-temperature diffusion coefficient D300 K=2.15×10-9 cm2 s-1, and a room-temperatisre diffusion length L300 K= 14.4×10-7 cm.