Crystalline Si nanoparticles with diameters between 2.5 and 20 nm are prepared by CO2-laser-induced decomposition of silane in a gas flow reactor. A small portion of the products created in the reaction zone is extracted through a nozzle into a high-acuum apparatus to form a freely propagating molecular beam of clusters and nanoparticles that can be deposited on suitable substrates. The strong visible photoluminescence (PL) of the Si nanocrystals is studied as a function of their size, and as a function of the time for which they are exposed to air. All observations can be explained on the basis of quantum confinement as the only origin of the PL. Chemical methods are exploited to modify the surface of the Si nanoparticles and to reduce their size, thus shifting their PL to shorter wavelengths. With this technique, the Si nanoparticles, collected in much larger quantities in the filter of the flow reactor, can be made strongly luminescent so that they may be used for various applications.