Neodymium-doped yttrium aluminum garnet (YAG:Nd3+) has been widely developed during roughly the last sixty years and has been an outstanding fluorescent material. It has been considered as the gold standard among multipurpose solid-state lasers. Yet, the successful downsizing of this system into the nano regimen has been elusive, so far. Indeed, the synthesis of a garnet structure at the nanoscale, with enough crystalline quality for optical applications was found to be quite challenging. Here, we present an improved solvothermal synthesis method producing YAG:Nd3+ nanocrystals of remarkably good structural quality. Adequate surface functionalization using asymmetric double-hydrophilic block copolymers, constituted of a metal-binding block and a neutral water soluble block, provides stabilized YAG:Nd3+ nanocrystals with a long term colloidal stability in aqueous suspensions. These newly stabilized nanoprobes keep the spectroscopic quality (long lifetimes, narrow emission lines, and large Stokes shift) characteristic of bulk YAG:Nd3+. The narrow emission lines of YAG:Nd3+ nanocrystals are exploited by differential infrared fluorescence imaging, thus achieving an autofluorescence-free in vivo readout. In addition, nanothermometry measurements, based on the ratiometric fluorescence of the stabilized YAG:Nd3+ nanocrystals, are demonstrated. The progress here reported paves the way for the implementation of this new stabilized YAG:Nd3+ system in the preclinical arena.