Yttrium iron garnet (YIG) ultrafine particles of several nanometers in diameter were prepared by the alkoxide method. The phase transformation of the particles during the course of calcination was studied in detail by transmission electron microscopy. A small fraction of the uncalcined amorphous particles was spontaneously crystallized into -Fe 2 O 3 . The amorphous phase undergoes incomplete crystallization by forming an intermediate phase at 660 o C calcination. Complete crystallization to YIG does not occur at temperatures lower than 675 o C. A small amount of YFeO 3 and Fe 3 2 Y 1 2 O 2 (intermetallic compound) nanocrystals were also formed at calcination temperatures as low as 660 o C. In selected area electron diffraction (SAED) experiment of the present YFeO 3 nanocrystals, we found a peculiar selection rule; we observed strong diffraction from the lattice planes, (i,j,k), if the sum, i+j+k was odd, and weak or no diffraction from other planes. In the SAED experiment of YIG nanocrystals, we found that the diffraction rings fluctuated in the radial direction.