The effects of preparation conditions on the microstructures and luminescence properties of microemulsion derived YAG: Eu3+ phosphors are investigated in this study. Both the emission spectra and EXAFS results reveal that the local environment of Eu3+ ions becomes more symmetric with increasing calcination temperatures. The symmetric environment of Eu3+ ions in the host results in increased emission intensity of the D-5(0) -> F-7(1) transition. The particle sizes of YAG: Eu3+ phosphors markedly reduce with decreased water content in the microemulsion system. The powders with reduced particle size exhibit strong luminescence intensity because of reduction in the non-radiative probability. For preparing bright YAG: Eu3+ phosphors via the microemulsion route, the water-to-oil volume ratio and calcination conditions need to be well controlled. (C) 2010 Elsevier B.V. All rights reserved.