Cadmium sulphide (CdS) nanoparticles doped with Co 2? and co-doped with Co 2? and rare earth metallic ions have been prepared by co-precipitation method. The synthesized nanoparticles have been characterized by X-ray powder diffraction studies, energy dispersive X-ray analysis, scanning electron microscopy (SEM), transmission electron microscopy (TEM), UV-visible spectroscopy, particle size by dynamic light scattering and photoluminescence studies. The X-ray diffraction results indicate that CdS nanoparticles can be co-doped with cobalt and rare earth metallic ions without altering XRD pattern. The particle size calculated from XRD results is in range of 40-50 nm. SEM results show that the synthesized particles are spherical in shape and TEM results reveal that synthesized particles have a very small size nearing to Bohr radius for bulk CdS. Absorption spectra of all the samples show strong blue shift from bulk CdS. Interesting luminescence characteristics have been observed for co-doped CdS nanoparticles at room temperature. The relative fluorescence intensity of co-doped samples is significantly higher than that of undoped and Co 2? doped CdS nanoparticles.