With the goal of creating magneto-optical devices, we demonstrated forming nanostructures inside a substrate of cerium-substituted yttrium iron garnet (Ce:YIG) by means of direct laser writing. Laser irradiation changed both the optical and magnetic properties of Ce:YIG. The measurements showed that the refractive index was increased by 0.015 (about 0.7% change) and the magnetization property was changed from hard to soft to decrease the coercivity. This technology enables the formation of 3-dimensional optical and magnetic nanostructures in YIG and will contribute to the development of novel devices for optical communication and photonic integration.