Neodymium-doped Y2Si2O7 nanopowders were synthesized by sol-gel and annealed under varying annealing temperature conditions. The phase transformation of Y2Si2O7 and the crystalline size change were observed with annealing temperature. Photoluminescence and the decay patterns of the 4F3/2→ 4I9/2,4I11/2, and 4I13/2 transitions were examined to reveal the spectroscopic characteristics of the powders. The spectral outputs of Nd3+:Y2Si2O7 phosphors remain strongly connected to the phase properties of Y2Si2O7. The positron lifetimes (τ 2, τ 3, and τ 4) and intensities (I 2, I 3, and I 4) obtained by positron annihilation lifetime spectroscopy were discussed for neodymium-doped Y2Si2O7 phosphors to relate the structural and boundary changes in terms of the phases and molar contents of the Nd3+ ions. The τ 2 and I 2 components were related to the structural open space in the grain, the τ 3 and I 3 components were correlated with vacancy-like defects in the grain boundaries, and the τ 4 and I 4 components were associated with vacancy defects in the grain, together with the effect of the increasing content of the Nd3+ ions.