Unlike bulk iodine, iodine molecular chains formed inside one dimensional (1D) nanochannels of AlPO4-5 (AFI) single crystals show unexpected PL behavior. Thanks to its unique 1D structure, the PL exhibits obvious polarization both in excitation and emission, by changing the angle between the c-axis of the channels and the polarization direction of the incident laser. As pressure increases, the PL intensity increases obviously due to the population increase of (I2)n chains upon compression. In contrast, the breaking of the (I2)n chain at high temperature leads to the decrease of PL intensity. Our theoretical calculation further points out that the PL may arise from the intrinsic band structure of (I2)n chains.