In this work, we have shown the use of Ln3+‐doped nanomaterials for the selective detection of H2O2 upto nM concentration. This is achieved by capping the Ce3+/Tb3+‐doped NaYF4 microrods using para‐phenylenediamine (p‐PDA). The microrods show strong green emission upon UV excitation due to strong energy transfer from Ce3+ to Tb3+ ions. This strong energy transfer is selectively quenched upon addition of H2O2 leading to reduction in the green emission intensity. This selective quenching of the green emission is due to oxidation of p‐PDA to Bandrowski's base which has strong absorption band close to 310 nm, which falls in 4f5d emission level of Ce3+ ions. The proposed mechanism is also supported by TD‐CAM‐DFT calculations performed on p‐PDA and its oxidized product. The reduction in the emission intensity is found to be very selective which is verified by the addition of other analytes (glucose, glutamic acid, uric acid, urea, tryptophan, aspartic acid and some metal ions, Na+, K+, SO42+, and Mg2+) which normally co‐exist with H2O2 in the body. More than 90% of the initial intensity of the Tb3+ was recovered upon the addition of a NaBH4 solution. The study clearly implies that the resonance energy transfer (RET) using Ln3+‐doped microrods can serve as a tool to selectively detect H2O2 upto the nanomolar concentration.