High quality Nd-doped single-mode fibers have been prepared by using a sol-gel process. The longest fluorescence lifetime measured was 520 μs in an Al: SiO2 glass fiber containing 0.47 wt.% neodymium oxide. An efficient neodymium fiber laser with a slope above threshold of 42% was successfully demonstrated with the sol-gel prepared Nd-doped single-mode fibers as a fiber laser oscillator.