White light-emitting diodes (wLEDs) have been considered to be new-generation light sources due to their advantages such as energy-saving, environment-friendly and long lifetime, safety and reliability. Nevertheless, it is the core issue to improve the luminous efficacy of wLED and excavate lighting properties in depth. At present, the commercial way to produce wLEDs are combining a blue-chip with yellow phosphor material as YAG: Ce³⁺, and the luminescence efficiency of white LED can be effectively improved by improving the luminescence efficiency of phosphor. A novel nanocomposite powder of YAG:Ce³⁺ coated with anatase nanotitania particles was prepared by sol-gel method using tetrabutyl titanate as the precursor, and the effect of TiO₂ nano-particles coating on the luminescence properties of YAG:Ce³⁺ phosphors were investigated. The phase structure and optical properties of the samples were characterized by X-ray diffractometer, scanning electron microscope and spectrometer. The results have revealed that TiO₂ coating YAG:Ce³⁺ phosphors prepared at different temperatures and different volume ratios (TTBO:H₂O) have a significant effect on the fluorescence spectrum of the powder, optimizing preparation temperature is 600 ℃ and TTBO:H₂O=2:1 (in volume ratio). The result of the tests showed that TiO₂ coating layer around the phosphor surface by the SEM observation, the diffraction peak of anatase is relatively strong, and the separation of the photogenerated e^-/h⁺ pairs can be promoted, leading to increasing quantum efficiency. The Raman spectrum indicated that the energy of localized surface plasmon resonance (LSPR) propagating on the interface at the excitation wavelength of 633 nm, and the intensity of the characteristic peaks at 1 264.10 and 1 283.59 cm^-1 were increased. The photoluminescence spectrum indicated that luminescence intensity of TiO₂ coating YAG:Ce³⁺ phosphors were improved 21%, the quantum efficiency has been improved 5.5%, which was by the contribution of the TiO₂ localized surface plasmon resonance effect. This study reveals that the localized plasmon effect based on TiO₂ could effectively improve the luminescence efficiency of YAG:Ce³⁺ phosphor, and the application of YAG:Ce³⁺ phosphor to wLED plays an active role in high efficiency, high power and large lumen condition.