Yb3+/Lu3+ co-doped cadmium oxide nanoparticles (Cd1−xYbx/2Lux/2O: X = 0 mol.%, 2 mol.%, 3 mol.%, 10 mol.%, 14 mol.%) were successfully synthesized through the sol–gel method. From the relevant x-ray diffraction patterns, a cubic crystalline structure similar to that of pure cadmium oxide (CdO) for all the samples was revealed. Through transmission electronic microscopy, the cubic crystalline structure of the prepared samples was further confirmed. On increasing the Ln3+ ions (Ln3+: Lu3+; Yb3+) level, a continual decrease in the size of the prepared samples, using scanning electron microscopy was revealed, and a tendency towards higher saturation magnetization (Ms) and superparamagnetic critical size regions was also proved. By using energy dispersive x-ray spectroscopy, the presence of O, Cd, C, Yb and Lu elements in the samples was revealed. Enhanced blue and UV emissions intensity of CdO NPs and an increased quantum yield efficiency relevant to the band gap and dopant-affected structural imperfections in the doped samples, as a function of dopant concentration, was established. From the UV–Vis absorption spectra, decreasing the localized optical band and the red shift of the band gap energy on increasing the dopant level were proved.