Nano-crystalline YAG:Ce (Y3Al5O12:Ce) with an average particle size of 10-50 nm was synthesized by the vapour phase reaction (CVR) in a hot-wall reactor. This nano-crystalline luminescent material has the advantage of a high light-conversion efficiency associated with superior light-scattering properties. Phases and compositions were analyzed by XRD and EDX, respectively. Photoluminescence was used to investigate the optical properties of the YAG host lattice doped with Cerium. As a first step the conditions for the in-situ production of the YAG phase were established. On the basis of previous DSC investigations of YAG phase formation, the DSC results were analyzed according to the Kissinger theory for thermally activated transformations. From the results it is predicted that, with sufficient heat transfer during the residence time of the particles in the hot zone of the reactor, YAG can be obtained in-situ during the CVR process. By modifying the parameters and the CVR setup it was possible to achieve conditions, which allow the production of in-situ YAG. Samples with Ce doping concentrations ranging from 0 to 2.65 at.% Ce were prepared to investigate the influence of the doping concentration on the luminescence of YAG:Ce.