We dispersed electrochemical etched Si into a colloid of ultrabright blue luminescent nanoparticles (1 nm in diameter) and reconstituted it into films or microcrystallites. When the film is excited by a near-infrared two-photon process at 780 nm, the emission exhibits a sharp threshold near 106 W/cm2, rising by many orders of magnitude, beyond which a low power dependence sets in. Under some conditions, spontaneous recrystallization forms crystals of smooth shape from which we observe collimated beam emission, pointing to very large gain coefficients. The results are discussed in terms of population inversion, produced by quantum tunneling or/and thermal activation, and stimulated emission in the quantum confinement-engineered Si-Si phase found only on ultrasmall Si nanoparticles. The Si-Si phase model provides gain coefficients as large as 103-105 cm-1. © 2001 American Institute of Physics.