This paper reports site-selective excitation and fluorescence spectroscopy of monoclinic Eu2O3 and Eu3+:Y2O3 nanocrystals, 14 and 23 nm average diameter, respectively. The nanocrystals were prepared by gas-phase condensation using CO2 laser heating of ceramic pellets. The nanocrystals form in the monoclinic phase, and the spectra show three sets of spectral lines due to the three cation sites in this crystal structure. Samples prepared from 0.1% Eu3+:Y2O3 starting material contained only Eu3+:Y2O3, and samples prepared from starting material of 0.7% or higher contained Eu3+:Y2O3 and Eu2O3 phases. In 0.1% Eu3+:Y2O3 energy transfer occurs from site A to sites B and C, but no interaction is observed between sites B and C. Energy transfer occurs between ail sites for Eu3+ concentration of 0.7% and higher. The D-5(0) fluorescence lifetimes for sites A, B, and C in 0.1% Eu3+:Y2O3 are 1.75, 1.23, and 1.32 ms, respectively, as compared to a radiative lifetimes of the C-2 site in cubic Eu3+:Y2O3 of 1.1 ms.