Quantum confined nanostructures of semiconductors such as Ge and Si are being actively studied due to their interesting optical and electronic transport properties. We fabricated Ge nanostructures buried in the matrix of polycrystalline-AIN grown on Si(111) by pulsed laser deposition at lower substrate temperatures than that used in previous studies. The characterization of these structures was performed using high resolution transmission electron microscopy (HRTEM), photoluminescence and Raman spectroscopy. HRTEM observations show that the Ge islands are single crystal with a pyramidal shape. The average size of Ge islands was determined to be 15 nm, considerably smaller than that produced by other techniques. The Raman spectrum reveals a peak downward shift, upto 295 cm−1, of the Ge-Ge mode caused by quantum confinement in the Ge-dots. Photoluminescence (PL) was observed both with a single layer of Ge nanodots embedded in the AlN matrix and from ten layers of dots interspersed with AIN. The PL of the dots was blue shifted by ˜0.266 eV from the bulk Ge value of 0.73 eV at 77 K, resulting in a distinct peak at ˜1.0 eV. The full width at half maximum (FWHM) of the peak was 13 meV, for the single layer and 8 meV for the ten layered sample, indicating that the Ge nanodots are fairly uniform in size, which was found to be consistent with our HRTEM results. The importance of pulsed laser deposition (PLD) in fabricating novel nanostructures is discussed.