The synthesis of neodymium-doped hexagonal tungsten oxide nanopowder was reported by using sodium tungstate as the tungsten source, neodymium nitrate as the neodymium source, and potassium sulfate as the mineralizing agent. Phase composition, micro-morphology and doping content of the obtained nanopowder were studied by using X-ray diffraction analysis, scanning electronic microscopyand X-ray photoelectron spectroscopy. The result shows that only neodymium-doped hexagonal tungsten oxide was obtained in the synthesized product and no impurity was found. Due to successfully intruding Nd3+ ion into the host lattice, partial tungsten ions were reduced to be pentavalent, which further resulted exciting electrons from valence band to conducting band and formation of additional photogenerated electron-hole pairs. Then the photochromic performance of nanoowder was found highly improved contributing to the increased absorbance of excitation light. The nanopowder with best photochromic property was obtained in the sample with a optimized trivalent neodymium ion concentration of 5.63%. Its change of color was estimated to be 13 times of that observed in the pure WO3.