Dy3+-doped Y3Al5O12 (YAG) nanophosphors have been effectively synthesized via facile solution technique at 600 °C using urea as a fuel and calcined at 950 and 1050 °C for further analysis. Powder X-ray diffraction (PXRD), Fourier transformation infrared (FTIR), transmission electron microscopy (TEM), energy dispersive X-ray (EDX) and photoluminescence (PL) studies were employed to confirm the synthesis, structural and luminescence properties of the phosphors. PXRD patterns of Y3Al5O12 and Y3Al5O12:Dy3+ corresponds to JCPDS card No. 73–1370 having cubic unit cell and Ia3̅d space group, which were also confirmed by Rietveld refinement analysis. TEM images display the homogeneously disseminated nanocrystals with smooth morphology and particle size in 50–85 nm range. Energy dispersive X-Ray analysis (EDAX) proposed the pure synthesis of materials with presence of only elements integrated within host lattice. The photoluminescence emission (PL) spectra of YAG:Dy3+ nanophosphors exhibit strong emission owing to 4F9/2→6F15/2 (480 nm) and 4F9/2→6F13/2 (577 nm) under 352 nm excitation. Critical distance confirmed that the energy transfer occurs via multipolar interaction mechanism. CIE chromaticity diagram displays the intense white light emission for the phosphors. These investigations suggest the potential applications of YAG:Dy3+ nanocrystals in white light emitting diodes (WLEDs).