Nanoparticle doping is an alternative approach the conventional solution doping method allowing the preparation of active optical fibers with improved optical and structural properties. The combination of the nanoparticle doping with MCVD process has brought new technological challenges. We present the preparation of fiber lasers doped with Er-doped yttrium aluminum garnet (Er:YAG) nanocrystals. These nanocrystals, prepared by a hydrothermal reaction, were analyzed by several structural methods to determine the mean nanocrystal size and an effective hydrodynamic radius. The nanocrystals were incorporated into silica frits with various porosity made by the conventional MCVD process. The Er:YAG-doped silica frits were processed into preforms, which were drawn into optical fibers. We studied the effect of the nanocrystal size and frit's porosity on the final structural and optical properties of prepared preforms and optical fibers. Selected optical fibers were tested as an active medium in a fiber ring laser setup and the characteristics of the laser were determined. Optimal laser properties were achieved for the fiber length of 7 m. The slope efficiency of the fiber laser was about 42%. Presented method can be simply extended to the deposition of other ceramic nanomaterials.fiber laser materials, such as high thermal stability, improved luminescence, etc. [7]. Recent progress in nanotechnologies has brought a completely novel powerful tool to this field.Rare-earth doped glass has been used as basic material in active fiber core. Tick [8] suggested to replace glass in the fiber core with glass-ceramic material to improve the active fiber properties. This innovative approach started a new research field of glass-ceramic and nanoparticle doped fibers [9,10]. However, the prepared fibers exhibited quite high background losses in comparison with conventional glass fibers [6,[11][12][13][14]. The nanoparticle doping of alumina nanoparticles, for the first time presented at 20th Annual Meeting of the IEEE Lasers and Electro-Optics Society in 2007 [15], has brought the major breakthrough in the field of nanoparticle doped active optical fibers. It was demonstrated that the nanoparticle doping is fully competitive with the conventional solution doping method. This novel method started a glamour career; it has attracted huge attention of the researchers [6,16,17] and has rapidly found its place in industry [18,19]. It has been generally accepted that the nanoparticle doping significantly improves properties of active optical fibers [16,20,21] in comparison with the traditional solution doping method [11]. A homogeneous distribution of nanoparticles inside the fiber core suppresses optical losses. The nanoparticle structure and their composition can improve luminescence properties of the incorporated rare-earth element which determines the operating wavelength of the fiber laser [1,6,17].A number of advanced methods and materials have been studied to produce active fibers suitable for fiber lasers. Besides the nanoparticle do...