Nanocrystalline X2 monoclinic lutetium oxyorthosilicate (X2-Lu2SiO5) doped with Pr3+ ions was synthesized by the soft sol-gel route. The product was characterised with X-ray diffraction and transmission electron microscopy to confirm the crystal structure and analyse the morphology on the nano- and micro-scales. The luminescence spectroscopy and the excited state dynamics were investigated employing time-resolved VUV spectroscopy upon excitation with synchrotron radiation. Fast and efficient host-to-impurity energy transfer was observed. The temperature dependence of 5d-4f emission decay dynamics was investigated. In view of a potential application as a nanostructured scintillator, the X-ray excited luminescence of the X2-Lu2SiO5 nanopowder was studied. Excitation and relaxation processes occurring in the nanocrystalline Lu2SiO5:Pr3+ are analyzed and discussed.