The current work reports the successful synthesis of ethylene glycol functionalized gadolinium oxide nanoparticles (Gd2O3 Nps) as a proficient electrocatalytic material for the detection of hydrazine and p-nitrophenol. A facile hydrothermal approach was used for the controlled growth of Gd2O3 Nps in the presence of ethylene glycol (EG) as a structure-controlling and hydrophilic coating source. The prepared material was characterized by several techniques in order to examine the structural, morphological, optical, photoluminescence, and sensing properties. The thermal stability, resistance toward corrosion, and decreased tendency toward photobleaching made Gd2O3 nanoparticles a good candidate for the electrochemical sensing of p-nitrophenol and hydrazine by using cyclic voltammetric (CV) and amperometric methods at a neutral pH range. The modified electrode possesses a linear range of 1 to 10 µM with a low detection limit of 1.527 and 0.704 µM for p-nitrophenol and hydrazine, respectively. The sensitivity, selectivity, repeatability, recyclability, linear range, detection limit, and applicability in real water samples made Gd2O3 Nps a favorable nanomaterial for the rapid and effectual scrutiny of harmful environmental pollutants.