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Nanoparticles of europium-doped yttrium oxide (Y2O3:Eu3+) were synthesized by coprecipitation method with use of different surfactants like butanol, hexanol, and oleic acid. The as-prepared Y2O3:Eu3+samples were annealed at 800 °C and characterized by X-ray diffraction (XRD), X-ray photoelectron spectroscopy (XPS), transmission electron microscopy (TEM), energy dispersive spectroscopy (EDS), and UV−visible and photoluminescence (PL) spectroscopy techniques. The nanoparticle shows cubic phase structure. Surfactant helps to inhibit or control the particle growth and avoids agglomeration of nanoparticles effectively by reducing the oxygen bridge bonds between the particles. The most intense red emission peak occurs at 614 nm at an excitation wavelength of λ = 200 nm. Nanoparticles of Y2O3:Eu3+with a particle size of 30 nm synthesized by using oleic acid with NaCl show a 73% rise in PL intensity of the 614 nm peak.