In this work, we report on the surfactant assisted synthesis of gadolinium oxide (Gd(2)O(3)) nanoparticles and their characterization through various microscopic and spectroscopic tools. Exhibiting a monoclinic phase, the nanoscale Gd(2)O(3) particles are believed to be comprising of crystallites with an average size of similar to 3.2 nm, as revealed from the X-ray diffraction analysis. The transmission electron microscopy has predicted a particle size of similar to 9 nm and an interplanar spacing of similar to 0.28 nm. Fourier transform infrared spectroscopy studies show that Gd-O inplane vibrations at 536.8 and 413.3 cm(-1) were more prominent for 80-keV Ar-ion irradiated Gd(2)O(3) nanosystem than unirradiated system. The photoluminescence (PL) spectra of irradiated specimen have revealed an improvement in the symmetry factor owing to significant enhancement of surface-trap emission, compared to the band-edge counterpart. Irradiation induced creation of point defects (oxygen vacancies) were predicted both from PL and electron paramagnetic resonance (EPR) studies. Further, the Raman spectra of the irradiated sample have exhibited notable vibrational features along with the evolution of a new peak at similar to 202 cm(-1). This can be ascribed to an additional Raman active vibrational response owing to considerable modification of the nanostructure surface as a result of ion bombardment. Probing nanoscale defects through prime spectroscopy tools would find a new avenue for precise tuning of physical properties with generation and annihilation of defects. (C) 2011 Elsevier Ltd. All rights reserved.