Mn2+-doped CdS nanocrystals (1-2 nm in size) dispersed in organic-inorganic silica xerogels are prepared by combining a controlled precipitation of nanocrystals in inverted micelles, a separation as a pure capped cluster powder, and a dispersion in hydrolyzed silicon alkoxide. ESR study identified two Mn2+ sites, one bulklike, and another one which is attributed to ions located near the surface and which represents the main contribution. The average number of Mn2+ per particle is in the 0.2-0.8 range. The luminescence is characteristic of a Mn2+ internal transition, with energy and lifetime as in bulk materials. This bright emission (quantum yield of 7%) corresponds to an energy transfer from surface trapped carriers to Mn2+ ions.