Nanocrystals of yttrium oxysulfide doped with trivalent europium has been synthesized using a two step sol-gel polymer thermolysis method employing urea formaldehyde resin in the presence of ethylene diamine tetra acetic acid as chelating agent. In this synthesis, marginal tunability in crystallite size (φ = 7-15 nm) was achieved by varying the concentration of reactants and organic precursors. In this nanocrystalline system, various luminescence transitions, in particular 5 D 0 -> 7 F 2 transition of Eu 3 + shows moderate (~ 60%) lifetime shortening which can be explained by considering possible increase in non-radiative rate (τ n r ) and also possible modification in optical electronegativity induced by surface states of the crystallites.