Our study is focused on the structural and morphological characteristics, optical behaviour and photocatalytic properties of undoped and 5 at% Eu³⁺-, Gd³⁺- and Y³⁺-doped CeO₂ nanoparticles prepared by a green hybrid sol-gel combustion method. Several techniques such as X-ray diffraction powder (XRD), Transmission Electron Microscopy (TEM), UV-Vis spectroscopy, Photoluminescence spectroscopy (PL) and Electron Paramagnetic Resonance (EPR) have been used to investigate the obtained samples. Moreover, the correlation between the characteristics and properties has been studied. The nanoparticles observed by TEM exhibit a pseudo-spherical shape, except for Y³⁺-doped CeO₂, which presents an acicular shape. The average size of undoped and rare-earth-doped CeO₂ nanoparticles is below 10 nm, in good agreement with the calculations performed based on XRD analyses. From UV-Vis analyses it has been deduced that with doping the band gap energy decreases, which shows that additional levels are introduced by doping into the CeO₂ band gap. The EPR spectra evidence similar behaviour for all doped samples. The photocatalytic activity was evaluated by the degradation of rhodamine B (RhB) under UV light irradiation. The photodegradation mechanism has been studied in depth based on the formation of electron-hole pairs, and to evidence the reactive oxygen species, ESR coupled with spin-trapping experiments was performed. In the case of Y-doped CeO₂ nanoparticles, the generation of both •OOH and •${\mathrm{O}}_2^{-}$ radicals involved in RhB photodegradation was highlighted.