The structure, luminescence spectroscopy, and lifetime decay dynamics of Eu 2 O 3 nanoparticles formed in MCM-41 have been investigated. Both X-ray diffraction and high-resolution transmission electron microscopic observations indicate that Eu 2 O 3 nanoparticles of monoclinic structure are formed inside channels of MCM-41 by heating at 140 °C. However, heat treatment at 600 or 700 °C causes migration of Eu 2 O 3 from the MCM-41 channels, forming nanoparticles of cubic structure outside the MCM-41 channels. After heating to 900 °C, some of the cubic Eu 2 O 3 particles change to monoclinic Eu 2 O 3 , and the MCM-41 structure breaks down and a different or disordered phase is formed. The feature of the hypersensitive 5 D 0 f 7 F 2 emission profile of Eu 3+ is used to follow the structural changes. In the luminescence spectrum of the sample prepared at 140 °C, the emission spectrum is dominated by peaks at 615 and 623 nm, while in the other samples a peak at 612 nm is prevalent. Photoluminescence lifetimes show the existence of short (<1 µs) and long (microsecond to millisecond) components for each sample. The fast decay is attributed to quenching by surface states of the nanoparticles or energy transfer to the MCM-41, while the longer time decays show the effects of concentration quenching. The monoclinic sample prepared at 140 °C shows a higher luminescence intensity than the cubic samples or the bulk powder. These observations indicate that MCM-41 as a template can be used for making and stabilizing monoclinic rare earth oxides, which normally are stable only at high temperatures and high pressures. More importantly, the nanophase Eu 2 O 3 /MCM-41 composite materials formed at low temperatures might represent a new type of efficient luminescence material with fast response, with potential applications in lighting and displays.