A systematic investigation is presented of the polarized optical absorption of the Nd3+ion in LiNbO3and LiNbO3(MgO) crystals. Energy levels of Nd3+are identified and labeled by appropriate crystal quantum numbers &mgr;=1/2 or &mgr;=3/2, in agreement withC3local symmetry. The anisotropic Judd–Ofelt theory is applied to estimate spectroscopic parameters relevant for laser applications (radiative lifetimes and branching ratios from the4F3/2laser state). Fluorescence lifetimes are also determined to estimate the quantum efficiency from the4F3/2state: &eegr;=0.6 for LiNbO3:Nd and &eegr;=0.5 for LiNbO3(MgO):Nd. The effect of MgO codoping in the energy levels as well as in the spectroscopic parameters of the Nd3+ion is evaluated and discussed. ©1995 American Institute of Physics.