Microwave irradiation at a frequency of 2.45 GHz and a power ranging between 22 and 30 W was used, in a water-oil microemulsion at 35+/-2 degrees C, to obtain stable, small, crystalline, anhydrous CdS nanoparticles exhibiting enhanced luminescence properties. The process of nanoparticles growth at different irradiation times was followed by UV-vis spectroscopy. It was observed that irradiated nanoparticles grew faster and their size reached a constant value. The final mean nanoparticle diameter was 2.7 nm, smaller than that observed in a non-irradiated sample, in which particle dimensions slowly increased even after 10 h. This finding was confirmed by high resolution transmission electron microscopy which also suggested that the spherical nanoparticles had a narrow size distribution and were spatially well separated. Furthermore, Fourier transform infrared spectroscopy was used to obtain information about structural changes that the microemulsion underwent when irradiated by microwaves. In particular, the evolution of the stretching and bending bands of water molecules along with the CO and SO3 stretching bands of the surfactant molecules, showed that water was selectively and almost completely extracted from the aqueous core of the reversed micelles. Changes in the surroundings of the nanoparticles surface were monitored by photoluminescence spectroscopy and variations in the emission band profiles indicated enhanced luminescence properties. The latter finding, as well as the inhibition of the nanoparticles growth process, are attributable to the progressive reduction of water content in the core of the reversed micelles.