CdS nanoparticles have been synthesized and stabilized in poly(N,N-dimethylacrylamide) hydrogels. The properties of the composite material have been characterized by UV-vis spectroscopy, scanning electron microscopy, X-ray diffraction, thermogravimetric analysis, and steady-state and time-resolved luminescence spectroscopy. This material can be obtained in three different states: swollen, shrunk, and freeze-dried. The swollen and the freeze-dried states correspond to a nanocomposite organic/inorganic (wet or dry) gel containing CdS nanoparticles of approximately 50 nm diameter while the shrunk state is a two-phase system containing CdS crystals, which precipitate forming interesting geometrical shapes.