In this study, we synthesized gadolinium oxide nanoparticles (Gd2O3 NPs) incorporated heteroatom‐doped microporous carbon nanofibers (CNF) to serve as electrode materials for enhancing supercapacitive energy storage. Our primary focus is on elucidating the impact of these hybrid electrode materials on key supercapacitor performance properties such as specific capacitance, specific energy, and specific power. To comprehensively assess the structural and chemical attributes of Gd2O3 NPs‐incorporated heteroatom‐doped microporous CNFs (CNF/Gd2O3) we employed an array of advanced characterization techniques, including scanning electron microscopy (SEM), transmission electron microscopy (TEM), Raman spectroscopy (RAMAN), X‐ray diffraction (XRD), and X‐ray photoelectron spectroscopy (XPS). Our research has yielded impressive results, demonstrating a significant increase in supercapacitive performance. Specifically, the CNF/Gd2O3‐1 symmetric supercapacitor cell (SSC) has demonstrated a good specific capacitance of 162.3 F/g and a high specific energy of 8.12 Wh/kg at a specific power of 300 W/kg. These findings could be a new pathway to prepare composite electrodes for use in energy storage applications and promote further development for other rare‐earth nanostructures.