Oxyfluoride glasses and glass-ceramics (GCs) have some niche advantages over other oxide and fluoride glasses, as they possess combined properties. This paper reports the structural, thermal, and photoluminescence (PL) properties of -doped oxyfluoride glasses and transparent GCs containing nanocrystals. Special efforts were undertaken to minimize the hydroxyl () content in the prepared samples to improve their optical features. Differential scanning calorimetry analyses were performed to determine the characteristic temperatures of the base glasses. X-ray diffractometry studies have confirmed the fluorite nanocrystals to be 10 nm in size. Reduced transparency in the ultraviolet (UV)–visible to the near-infrared (NIR) regions was observed for the GCs compared to the base glass with increasing thermal treatment temperature. A higher PL intensity upon 920-nm excitation was obtained in the GCs compared to that of the base glass. The absolute photoluminescence quantum yield upon 920-nm laser excitation was evaluated using an integrating sphere and an optical spectrum analyzer. It was observed that the lifetime of the level of the ions decreases with increasing ceramization temperature. The potential advantages of using such oxyfluoride GCs over commonly studied single crystals for laser cooling applications are discussed.