A forced hydrolysis technique is used for preparing Y2O3: Eu3+ powders at low processing temperatures. The technique uses yttrium oxide, europium oxide, and nitric acid and urea, and has the potential for large-scale production for industrial applications. Several experimental conditions have been examined to optimize the luminescence efficiency. The best result was found to be at 2 mol% Eu doping and a 2 h firing of 1400 °C. Microstructural information provided by x-ray diffraction, scanning electron microscopy (SEM), and transmission electron microscopy (TEM) have been applied to interpret the observed luminescent properties.