Microdisk-arrays of vertically stacked 30–70 nm Ge nanodots embedded within SiO2 were fabricated using thermal oxidation of Si0.75Ge0.25 abacus-shaped pillars and followed by post-annealing in oxygen-deficient conditions. The Ge nanodots are subjected to increasing quantum-confinement and tensile-strain by reducing dot size. We show that considerable quantum-confinement and tensile-strain can be generated within 30 nm Ge nanodots embedded in SiO2, as evidenced by large Raman red shifts for the Ge-Ge phonon lines in comparison to that for bulk Ge. These large quantum-confinement and tensile-strain facilitate direct-bandgap photoluminescence experimentally observed for the Ge nanodots, and are consistent with the strain-split photoluminescence transitions to the light-hole (LH) and heavy-hole (HH) valence bands at 0.83 eV and 0.88 eV, respectively. Time-resolved photoluminescence measurements conducted from 10–100 K show temperature-insensitive carrier lifetimes of 2.7 ns and 5 ns for the HH and LH valence-band transitions, respectively, providing additional strong evidence of direct bandgap photoluminescence for tensile-strained Ge nanodots.