LiNbO3 single crystals have been implanted with 2.0 or 3.5 MeV Er ions with fluences between 2.0×1014 and 7.5×1015 cm-2 and annealed at temperatures between 500 and 1060 °C in a wet oxygen atmosphere. Photoluminescence spectroscopy, Rutherford backscattering spectroscopy, and secondary‐ion‐mass spectrometry have been used to study the influence of the annealing treatment on the optical activity of the Er ions, the crystal structure of the implanted LiNbO3 layer, and the depth distribution of the Er ions, respectively. The as‐implanted, amorphized LiNbO3 already emits the characteristic photoluminescence (PL) of Er3+ around 1.53 μm. Annealing for 1 min at 500 °C causes recrystallization of the amorphized layer by columnar solid‐phase epitaxial regrowth from the substrate. The PL intensity increases by more than one order of magnitude on annealing at 500 °C and the PL lifetime rises from 1.65 to 2.85 ms. In contrast, much longer annealing times and a much higher temperature are necessary to remove the columns and restore the perfect lattice but do not further improve the optical properties. Up to an Er concentration of 0.12 at. % no concentration quenching effects are noticed. MeV implantation‐doped samples show the same optical spectra as those doped during growth from the melt.