The paper describes the polymer-salt method of neodymium-doped aluminum yttrium garnet (YAG:Nd) crystals formation inside the channels of a microstructured silica fiber preform. The crystals formation was performed through the impregnation of inner surfaces of the channels by aqueous solutions of thermally decomposable salts (yttrium nitrate, aluminum nitrate, neodymium chloride) and an organic polymer with subsequent processes of drying and thermal treatment at the temperature of 1100°C. The composite structure prepared was drawn into the fiber at the temperature of 2000°C. The X-ray diffraction analysis revealed the formation of YAG:Nd crystals from 25 nm to 37 nm in size in the silica glass matrix of the fiber. Measurement of the attenuation spectral dependence confirmed the presence of optical signal absorption bands inherent to Nd3+ ions. The shape of the nanocrystals luminescence spectrum is characteristic to the YAG:Nd with a peak at the wavelength of 1064 nm.