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Germanium nanocrystals in SiO2 with an average diameter of 5–25 nm were fabricated by co-deposition and annealing at 700–1000 °C. X-ray diffraction and transmission electron microscopy were used to measure the nanocrystal growth as a function of anneal time and temperature. The precipitation of nanocrystals was found not to follow the theory for precipitation from a solid solution of Lifshitz–Slezov; nanocrystal growth appears instead to be determined primarily by anneal temperature with little anneal time dependence. This departure from theory is attributed to the high concentration (40 at%) of germanium in the deposited films. A modified log-normal distribution was found to describe the distribution of nanocrystal sizes best. Photoluminescence was observed from nanocrystal-containing films, with luminescence energy shifted from that of bulk germanium. The luminescence spectra are in agreement with the theory of Brus for quantum confined carriers in small semiconductor crystals.