The application of special nanomaterials is promising for the development of new methods for the diagnostics and treatment of cancer. Photodynamic therapy (PDT) is a well-known and recognized method of cancer treatment. This type of therapy is less carcinogenic and mutagenic compared to radiation and chemotherapy, since the applied photosensitizers do not bind to DNA of the cells. However, currently this technique is only applicable to skin cancer, while its extension to the treatment of abdominal tumors requires the creation of pharmacological drugs for PDT, which along with a photosensitizer include a colloidal solution of nanosized luminescent phosphor emitting visible light with the required wavelength under the influence of infrared, X-ray or γ-radiation, which easily penetrates the body tissues. Since photosensitizers are already available as commercial products, the most important goal is the development of nanosized phosphors providing the required radiation convertion. In this study, the effects of hydrothermal synthesis, duration and the conditions of rapid thermal annealing (RTA) on Y2O3:Eu phosphor particle size were studied. The hydrothermal synthesis technique was carried out in two ways: chloride (precipitation from a chloride solution using NaOH and NH4OH precipitators) and acetate (decomposition of mixed acetate either without a dispersant at 230° C for 24 hours, or using PEG-200 and PEG-2000 as dispersants at 230 °C for 12 hours). The rapid thermal annealing was performed either at 600 °C for 20 minutes, or at 800 °C for 5 minutes. The developed synthetic approaches afforded Y2O3:Eu nanosized phosphor samples with the particle size not exceeding 200 nm.