The sol–gel process has been applied to the preparation of small‐sized CdTe‐doped silica glasses. Gels synthesized by the hydrolysis of a complex solution of Si(OC2H5)4, Cd(CH3COO)2· 2H2O, and Te were heated from 350° to 600°C in a H2─N2atmosphere to form fine cubic CdTe crystals. The size of CdTe crystals, determined from the line broadening of X‐ray diffraction pattern, increases from 4 to 9 nm in diameter with increasing heat‐treatment temperature. The optical absorption edge shifts to the higher‐energy side as the size of the CdTe crystals decreases. This phenomenon is interpreted in terms of a quantum confinement effect of electron and hole in the Cd