Eu2O3 nanocrystals are synthesized by a colloidal precipitation route in the size range 2-40 mm. The nanocrystals are passivated with a surface layer of trioctyl phosphine oxide (TOPO) in order to eliminate surface recombination effects. When pumped at 254 nm (4f --> 5d transition) the nanocrystals exhibit red luminescence characteristic of D-5(0) --> F-7(n) Eu3+ transitions within the cubic form of Eu2O3. The efficiency of the luminescence is increased by a factor of five as the particle size drops below 10 nm; it is suggested that confinement of the long lifetime Eu3+ excitation within the nanocrystal is responsible for this effect.