Praseodymium (Pr3+)-doped LiYF4 nanophosphors have garnered significant interest for their potential applications in lasers, phosphors, and quantum memories. However, there remains a lack of comprehensive research on the local coordination environment and luminescence spectroscopy of Pr3+:LiYF4 nanocrystals. This study presents the first investigation of the ground-state structure of Pr3+:LiYF4 crystals by employing the crystal structure prediction method, and a [PrF8]5- ligand complex with S4 local symmetry is determined. The complete energy levels of the Pr3+ ions in LiYF4 nanocrystals are unveiled by using our newly developed well-established parametrization matrix diagonalization method. A novel set of free-ion and crystal-field parameters is derived through a good simulation with 45 experimental energy levels. Many of the emissions of Pr3+-doped LiYF4 are successfully reproduced based on Judd-Ofelt theory, and these transitions are comparable to the experimental ones. Moreover, two new prominent emission bands with their peaks at 675 and 849 nm originating from 1I6 → 3F4 and 1I6 → 1G4 transitions, respectively, are predicted by us for the first time. This study could provide a feasible method to search for practical laser transition channels of solid-state lasers based on Pr3+: LiYF4 nanophosphors.