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Phosphor particle size effect on luminous efficacy is studied for three types of phosphor converted white light-emitting diodes (WLEDs) using a Monte Carlo simulation tool. It is demonstrated for the first time that the size effect is nonmonotonic and exhibits minima in the submicrometer size range. In particular, for different LED packages, the lowest luminous efficacy all exists at the dimensionless particle size parameter (πd/λ) around 5.6. Moreover, the simulation results are verified by a theoretical model developed for the estimation of critical particle size. Finally, this study provides important technical implications for phosphor development and resolves one of the most critical issues in WLED manufacturing.