The influence of Eu doping (0.5, 1 and 2 mol.%) and annealing in an oxygen-deficient atmosphere on the structure and optical properties of SnO₂ nanoparticles were investigated in relation to electronic structure. The X-ray diffraction (XRD) patterns revealed single-phase tetragonal rutile structure for both synthesized and annealed Eu-doped SnO₂ samples, except for the annealed sample with 2 mol.% Eu. The results of X-ray photoelectron spectroscopy (XPS) emphasized that europium incorporated into the SnO₂ host lattice with an oxidation state of 3+, which was accompanied by the formation of oxygen vacancies under cation substitution of tetravalent Sn. Moreover, XPS spectra showed the O/Sn ratio, which has been reduced under annealing for creating additional oxygen vacancies. The pulse cathodoluminescence (PCL) demonstrated the concentration dependence of Eu site symmetry. Combination of XRD, XPS and PCL revealed that Eu doping and following annealing induce strongly disordering of the SnO₂ crystal lattice. Our findings provide new insight into the interaction of rare-earth metals (Eu) with host SnO₂ matrix and new evidence for the importance of oxygen vacancies for optical and electronic structure formation.