Experimental results of polymer-salt synthesis of Yb:YAG nanopowders and analysis of their structure and luminescent properties are presented. Infrared absorption spectra of synthesized materials are presented. The results of XRD analysis show that Yb:YAG nanocrystals with sizes of 18-35 nm form at a temperature of 900-1100 °С. The study on photoluminescence spectra and decay curves shows that properties of synthesized powders are close to properties of macroscopic materials produced by traditional high-temperature methods.