Highly photoluminescent glass was prepared by embedding water-soluble nanocrystals in a glass matrixusing a novel sol−gel process. Thiol-stabilized CdTe nanocrystals and aminopropyltrimethoxysilane werefound to be the best combination in the preparation. The synthesis process had to be optimized to avoidnanocrystal agglomeration. The nanocrystals thus embedded in the glass matrix did not show anydeterioration of the surface condition. The obtained glass combines excellent optical properties of nanocrystalswith the high stability of glass; it emits light of various colors with narrow emission spectra and highphotoluminescent efficiency (41%).