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Carbon dioxide (CO2) photoreduction into renewable fuels over semiconductor photocatalysts has emerged as a green and sustainable alternative for energy production. Consequently, tremendous efforts are being performed to develop robust and sustainable photocatalysts. Therefore, visible-light active nanocomposite photocatalysts composed of 5.0–20.0 wt.% bismuth oxide (Bi2O3) and cerium oxide (CeO2) were synthesized by a sol-gel-based process. The prepared nanocomposites were evaluated for the promoted photocatalytic reduction of CO2 into methanol (CH3OH). Various characterizations of the obtained photocatalysts exposed an outstanding development of crystalline structure, morphology, and surface texture due to the presence of Bi2O3. Moreover, the absorbance of light in the visible regime was improved with enhanced charge separation, as revealed by the exploration of optical response, photoluminescence, and photocurrent measurements. The overall bandgap calculations revealed a reduction to 2.75 eV for 15% Bi2O3/CeO2 compared to 2.93 eV for pure CeO2. Moreover, the adjusted 2.8 g L−1 dose of 15% Bi2O3/CeO2 selectively produced 1300 μmol g−1 CH3OH after 9 h of visible light irradiation. This photocatalyst also exhibits bearable reusability five times. The improved progression of 15% Bi2O3/CeO2 is denoted by significant charge separation as well as enhanced mobility. This study suggests the application of metal oxide-based heterojunctions for renewable fuel production under visible light.