When replacing lanthanum with yttrium, mixed fluoride crystalline La1−x−yYxNdyF3 colloidal solutions and nanopowders (x = 0.1–0.3; y = 0.001, 0.01) demonstrate significant heterogeneity of the crystal structure. Therefore, the luminescence excitation and emission spectra of the Nd3+ ion are significantly inhomogeneously broadened. The spectral broadening increases with increasing yttrium concentration from 10 to 30 at.%. The measured luminescence band of Nd3+ ion with a maximum of approximately 862.5 nm includes the luminescence of three groups of optical centers OC1 − OC3. The luminescence of these OCs is quenched by OH− acceptors, which were embedded into the volume of nanoparticles (NPs) during the hydrothermal synthesis. Density functional calculations revealed three possible local positions of molecular OH− groups replacing fluorine ions. The observed difference in the luminescence quenching kinetics of the OC1 − OC3 centers is due to the different coordination of the local OH− groups around the Nd3+ ions.