CdS and CdS:Eu quantum dots (QDs) with relatively uniform size and a narrow size distribution were fabricated by a solvothermal method. X-ray diffraction and Raman spectroscopy analyses revealed that the synthesized samples were polycrystalline with a cubic structure. An almost spheroidal morphology with slight polydispersity was observed in both low and high-resolution transmission electron microscopy images. The optical band gap of the CdS and CdS:Eu QDs was found to be 3.1–3.3 eV. An X-ray photoelectron spectroscopy analysis disclosed the existence of Eu with a trivalent state and the obtained composition values are nearer to stoichiometry. The CdS:Eu QDs displayed room-temperature ferromagnetism. The CdS:Eu QDs showed enhanced photocatalytic activity compared to CdS during malachite green oxalate dye degradation under artificial solar illumination. Hence, Eu doping is a promising path for facilitating better photocatalytic activity and ferromagnetism of CdS.