A novel ceramic synthesis technique, flame spray pyrolysis (FSP) was investigated for the production of nanophosphor particles. Among the various types of synthesis technique for phosphors, FSP is a powerful method which is capable of producing particles with good crystallinity and high luminescence efficiency. Red light emitting Eu3+ doped Y2O3 nanophosphor was prepared by FSP from nitrate based liquid precursors with high flame temperature. Flame temperature is an important factor to obtain phosphor particles with dense and spherical shape. Different molar percentage of urea was added into the precursor, addition of urea increases the temperature in the flame zone and promotes the formation of nano-size and spherical shaped particles. The importance of urea in the precursor to obtain well dispersed Y2O3:Eu3+ nanophosphor has been studied. The characteristics of nanophosphor such as crystallinity, morphology and photoluminescence in the presence of different moles of urea in nitrate based aqueous solution were investigated. On varying the overall concentration of the precursor, both the optical properties and crystallinity were investigated. XRD spectra showed as-prepared phosphors were obtained directly as cubic phase Y2O3:Eu3+ nanophosphor with high crystallinity and without any post-heat treatments. Luminescence intensity of nanophosphor increased with the amount of urea till 2 M percentages, further increase in urea concentration was found to reduce the PL intensity. We have developed a continuous single-step fabrication method for nanocrystalline Y2O3:Eu3+ nanophosphor without any post-heat treatments procedure.