A novel Y3(1−x)Er3xGa5O12 nanocrystalline garnet has been synthesized by a sol–gel technique and a complete structural, morphological, vibrational, and optical characterization has been carried out in order to correlate the local structure of the Er3+ ions with their optical properties. The synthesized nanocrystals are found in a single-phase garnet structure with an average grain size of around 60 nm. The good crystalline quality of the garnet structure is confirmed by FTIR and Raman measurements, since the phonon modes of the nano-garnet are similar to those found in the single crystal garnet. Under blue laser excitation, intense green and red visible and 1.5 μm infrared luminescences are observed, whose relative intensities are very sensitive to the Er3+ concentration. The dynamics of these emissions under pulsed laser excitations are analyzed in the framework of different energy transfer interactions. Intense visible upconverted luminescence can be clearly observed by the naked eye for all synthesized Er3+-doped Y3Ga5O12 nano-garnets under a cw 790 nm laser excitation. The power dependency and the dynamics of the upconverted luminescence confirm the existence of different two-photon upconversion processes for the green and red emissions that strongly depend on the Er3+ concentration, showing the potential of these nano-garnets as excellent candidates for developing new optical devices.