This work reports on the spectroscopic properties of europium ions intercalated in a vanadium pentoxide matrix, as well as the effects of thermal treatment on its structural and electronic properties. X-ray diffraction, TG/DTA, ESR, luminescence as well as XANES were used in order to characterize the intercalation compound. For the as grown samples, the intercalation of Eu3+ is observed to have little effect in the V2O5 lamellar structure, however the inter-planar spacing grows from 1.19 nm to 1.33nm for a 10% Eu3+ content. The luminescence for the as grown samples are dominated by the host, the same happening with the ESR spectra. However ESR data show that the presence of Eu3+ in the host induces the partial reduction of vanadium to V4+ For samples treated above 873K the luminescence excitation spectra presents a new shoulder at 300 nm, which when excited shows emissions bands typical of the Eu3+ In ESR the same thermal treatments are marked by the appearance of a new broad line assigned to ferromagnetic EuO, as well as the partial oxidation of V4+ to V5+ This result may be correlated to suppression of Eu3+ luminescence due to the presence of water in the neighborhood of Eu3+.