Transparent nanostructured glasses were prepared from an oxy-fluoride precursor glass doped with rare-earth ions. Analysis of the local environment of rare-earth ions using site-selective and phonon sideband spectroscopies indicated that rare-earth ions were preferentially incorporated into β-PbF 2 nanostructured crystals formed upon heat-treatment. Lifetimes of various energy levels and emission intensities in Tm 3+ and Ho 3+ ions increased with the formation of nanostructured crystals inside the glass matrix.