The main idea of this research is to synthesize the neodymium oxide (Nd2O3) nanoparticles with a particle size of less than 10 nm and to investigate the influence of leaf extracts of different plants. Leaf extracts of three plants namely Phyllanthus emblica, Citrus limetta, and Citrus paradisi, were used for the fabrication of Nd2O3 via the sol–gel and green synthesis methods, and the mechanism for the synthesis of neodymium oxide has been investigated. All prepared samples were subjected to UV–Visible Spectroscopy, Fourier Transform Infrared spectroscopy (FTIR), Thermogravimetric analysis (TGA), X‐ray diffraction (XRD) analysis, and Scanning Electron Microscopy (SEM) and Energy Dispersive X‐ray (EDX) analysis to study the optical and structural properties. The band gap of the neodymium oxide nanoparticles was observed between 4.45 and 5.26 eV. The bond length of Nd‐O for the neodymium oxide samples as‐synthesized was calculated as 2.18 and 2.24 Å by using FTIR data. Furthermore, kinetic and thermodynamic parameters were calculated using TGA. XRD patterns showed the formation of cubic, monoclinic, and hexagonal structures of Nd2O3. The Nd2O3 nanoparticles were used as photocatalysts for the degradation of methylene blue under irradiation of sunlight, and the maximum percentage degradation of 74.8% was observed.