Time-resolved luminescence characteristics have been studied for cerium doped YAG nanopowders (NP) and nanostructured ceramics (NC). The results obtained have been compared to the luminescence characteristics for the well studied YAG:Ce3+ single crystal (SC). It was detected that the luminescence decay kinetics of Ce3+ related emission in nanocrystals can be closely approximated by two exponents, whereas a single exponential decay was observed in the single crystal. It was also found that the luminescence decay time and light yield of Ce3+ emission are strongly dependent on the cerium concentration and an unusual concentration quenching of Ce3+ emission was observed in YAG nanocrystals. The origin of the differences of luminescence characteristics for cerium doped nanocrystals and SC are discussed. It is suggested that there are special Ce3+ sites which are closely related to the surface states and that they have a strong influence on the luminescence properties of cerium doped YAG nanocrystals.