In this study, pure cobalt ferrite (CoFe2O4) nanoparticles and europium doped CoFe2O4 (CoFe2−xEuxO4; x = 0.1, 0.2, 0.3) nanoparticles were synthesized by the precipitation and hydrothermal approach. The impact of replacing trivalent iron (Fe3+) ions by trivalent rare earth europium (RE-Eu3+) ions on the microstructure, optical and magnetic properties of the produced CoFe2O4 nanoparticles was studied. X-ray diffraction (XRD) and Fourier transform infrared (FTIR) spectra exposed the consistency of a single cubic phase with the evidence of Eu2O3 phases for x ≥ 0.2. FTIR transmittance spectra showed that, the all investigated samples have three characteristic metal-oxygen bond vibrations corresponding to octahedral B-site (υ1 and υ2) and tetrahedral A-site (υ3) around 415 cm−1, 470 cm−1 and 600 cm−1 respectively. XRD and energy dispersive X-ray spectroscopy studies affirmed the integration of RE-Eu3+ ions within CoFe2O4 host lattice and decrease of average crystals size from 13.7 nm to 4.7 nm. Transmission electron microscopy (TEM) analysis showed the crucial role played by RE-Eu3+ added to CoFe2O4 in reducing the particle size below 5 nm in agreement with XRD analysis. High resolution-TEM (HR-TEM) analysis showed that the as-synthesized spinel ferrite, i.e., CoFe2−xEuxO4, nanoparticles are single-crystalline with no visible defects. In addition, the HR-TEM results showed that pure and doped CoFe2O4 have well-resolved lattice fringes and their interplanar spacings matches that obtained by XRD analysis. Magnetic properties investigated by the vibrating sample magnetometer technique illustrated transformation of magnetic state from ferromagnetic to superparamagnetic at 300 K resulting in introducing RE-Eu3+ in CoFe2O4 lattice. At low temperature (~5 K) the magnetic order was ferromagnetic for both pure and doped CoFe2O4 samples. Substitution of Fe3+ ions in CoFe2O4 nanoparticles with RE-Eu3+ ions optimizes the sample nanocrystals size, cation distribution and magnetic properties for many applications.