Yttrium aluminum oxide YAlO3 is an attractive laser host material for lanthanide ions like Nd3+. In this paper, a dual liquid/vapor-fed flame synthesis (DLVF) system is developed for investigating the role of SiO2 coating on flame-made YAlO3:Nd3+ nanophosphors. The hexamethyldisiloxane (HDMSO) vapor is flexibly fed into the YAlO3:Nd3+ flame spray flow at different positions and molar ratios. We find that the introduction of SiO2 coating dramatically improves the crystallinity of YAlO3:Nd3+cores because of the heat-insulation effect and nearly doubles the fluorescence intensity. Through a timescale analysis, we demonstrate that the best timing for coating injection is when the small particles have already been formed but not heavily aggregated. An early injection could result in segregated SiO2 particles and some impurities like Al2SiO5, while a delayed injection leads to the coating of SiO2 on the entire aggregates instead of on individual particles. Experiments of different coating ratios show that the coating ratio 1:1 of Si:(Y+Nd) produces the best crystallinity and strongest fluorescence intensity. Further increase of the coating ratio does not show any improvements of the crystallinity, and may even causes the decrease of the relative fraction of Nd3+ ions. Compared with YAG:Nd3+ bulk materials (with a typical optimum doping concentration 1.1mol%) and uncoated YAlO3:Nd3+ nanophosphors (with an optimum doping concentration 2 mol%), the SiO2 coating promotes the optimum Nd3+ doping concentration up to 3 mol%.