Hypothesis: Undoped TiO2 nanopartides are considered as a poor photocatalytic candidate in visible light due to the wide band gap. Incorporation of Gd ions is expected to modulate the electronic structure of the material and thereby enhance the photocatalytic properties of the material. Experiments: Gadolinium doped TiO2 nanoparticles were fabricated via a simple sol-gel method. Findings: The surface area of Gd doped TiO2 (225 m(2)/g) nanopartides is much higher than that of undoped TiO2 (95 m(2)/g). Doping of Gadolinium enhances the visible light absorption property of TiO2 nanoparticles. Photoluminescence intensity increases at 0.03 and 0.05 mol and thereafter reduces at 0.07 mol. The photocatalytic efficiency of these nanoparticles is evaluated by observing degradation of phenol in aqueous solution under visible light. The doped nanoparticles are found to exhibit better photocatalytic activity. This enhancement has been attributed to the introduction of the Gd 4f energy levels in the band gap of TiO2. The presence of these states has been further confirmed by theoretical study based on density functional theory (DFT). It is speculated that the 4f states of Gd act as efficient electron trap centers. These 4f states facilitate electron migration to the surface making available free carriers to take part in photocatalysis. (C) 2014 Elsevier Inc. All rights reserved.