The complex formation and morphology of the NdCI3—PEO system are presented together with some preliminary results on the Nd(DPM)3 \Nd—tris—2,2,6,6—tetramethyl —3,5—heptane dionate]—PEO system. Although the NdCl3—PEO complex is found to be highly hygroscopic, it is shown that residual moisture can be removed reversibly, thereby permitting the role of water in affecting the morphology of the solid to be examined. It is concluded that complexation is a competitive process between the ether oxygens on the polymer backbone and water. Under anhydrous conditions the resultant complex is amorphous at a \EO]/\NdCl3] molar ratio approximately less than ca. 8, but above this critical value the PEO in excess of the stoichiometric ratio presents a second partially crystalline phase. The glass transition temperatures were found to increase sigmoidally with increasing salt content. Despite the hygroscopic nature of Nd(DPM)3 the resultant complexes were found to be moisture resistant upon prolonged exposure to the atmosphere.