Abstract The features and characteristics of the so-called polyol method with regard to a preparation of nanoscale compounds and nanoscale functional materials are summarised. As an example, the polyol-mediated synthesis of several types of phosphor host lattice materials is presented on the nanoscale. This includes: Y 2O 3, LaPO 4, Sr 5(PO 4) 3Cl, YVO 4, Zn 2SiO 4, and ZnS. In addition, the preparation of γ-Fe 2O 3 as a magnetic pigment, 10 to 100 nm in diameter is discussed. Based on the magnetic characterisation, suspensions of γ-Fe 2O 3 particles in diethylene glycol, with diameters up to 40 nm show super-paramagnetic properties.