The synthesis of sub-micron phosphorescent particles has been widely studied during the past decade because of the promising industrial application of these materials. A number of matrices have been developed, the most actively researched being strontium aluminate doped with europium (Eu²⁺) or dysprosium (Dy³⁺), because of its better stability and longer afterglow than other matrices. However, the powders produced by different synthetic routes have a wide particle size range, between 20 and 100 μm. A method of reducing the particle size has not yet been developed, but becomes important if the practical value of these particles is to be realised. As a means of producing sub-micron particles, in the present study the powders were synthesized by a combustion method followed by a dry grinding process. In optimizing the synthesis, particularly in order to understand the effect of the fuel (urea) on phase formation, it was possible to control the reaction and to achieve high luminescence. In addition, a dry grinding process was developed which decreases the particle size and avoids the presence of moisture during the grinding procedure. A correlation between the presence of secondary phases and Eu²⁺ content was established, and the phosphors can be treated in a nitrogen–hydrogen atmosphere to increase crystallinity and photoluminescence. The underlying significance of the study lies in evaluating the practical application of the product. It was concluded that such a material might be a promising candidate for replacing micron-sized phosphor particles in a number of areas in the future.