Nanocrystalline yttrium oxide has been synthesized by thermal plasma route using a dc plasma reactor. The phase composition of the product was analyzed by X-ray diffraction (XRD). The XRD patterns showed cubic and monoclinic phases in the synthesized product. The powder was characterized by scanning electron microscopy and transmission electron microscopy (TEM). The TEM images confirmed the nanometer size of the particles in the range of 3–47 nm. Surface area analysis [Brunauer–Emmett–Teller (BET)] and particle size analysis by laser scattering have also been used to characterize the particle size of plasma-synthesized yttria nanoparticles. The TEM images, BET, and particle size by laser scattering also reveal that particles are agglomerated. The results showed that the particle size decreased with an increase in plasma power and the fraction of nanosized powder increased with power. The amount of metastable monoclinic phase was found to increase as the fraction of particles below 20 nm increased.