Tin oxide (SnO₂) nanocrystals of a few nanometers are of great interest for electronic applications. Here we present a mini-arc plasma method to produce aerosol tin oxide nanocrystals at atmospheric pressure. The product SnO₂ nanocrystals are then assembled onto the external surface of carbon nanotubes (CNTs) to form hybrid SnO₂–CNT structures. The absorption properties of both the SnO₂ nanocrystals and the SnO₂–CNT hybrid structures have been characterized. Quantum size effects have been observed for as-produced SnO₂ nanocrystals. The intrinsic nanoparticle size selection during the assembly process results in a blue shift of the absorption spectrum for hybrid nanostructures.