SnO₂ and F doped SnO₂ (FTO) nanoparticles (NPs) have been synthesized by the hydrothermal method with subsequent annealing at 500 °C. The microstructure and photoluminescence (PL) property of SnO₂ and FTO NPs have been investigated, and an assumption model about the luminescence process of FTO NPs has been proposed. All of the SnO₂ and FTO NPs possess polycrystalline tetragonal rutile structures, and the average size in the range of 16.5–20.2 nm decreases with the increasing of F doping content. The doping element F is shown a uniformly distribution by electron energy loss spectroscopy (EELS) mapping. The oxygen vacancy concentration becomes higher as is verified by Raman and X-ray photoelectron spectra (XPS). There are three kinds of oxygen chemical states in SnO₂ and FTO NPs, in which O_α corresponds to oxygen vacancies. The room temperature PL position is observed to be independent of F doping content. F⁻ may substitute O²⁻ into the SnO₂ lattice by generating $F_O^{+}$ and one extra e⁻, which can combine with $V_O^{+}$ or $V_O^{++}$ to generate $V_O^0$ or $V_O^{+}$ to ensure charge balance.