Herein, we reported the effect of the surfactants on the structural, morphological, luminescent and magnetic properties of Gd2O3:Eu phosphors synthesized via co-precipitation routes. Trioctylphosphine oxide (TOPO) and cetyltrimethylammonium bromide (CTAB) were used as surfactants in different molar ratios during synthesis. The concentration of the Eu ions was fixed 4 mol% to avoid the variation due to concentration quenching. The structural, morphological, optical and magnetic properties of synthesized phosphors were studied by X-ray diffraction (XRD), field emission scanning electron microscopy (FESEM), UV–Visible spectroscopy (UV–vis), Fourier transform infrared spectroscopy (FTIR), photoluminescence (PL) spectroscopy, and vibrating sample magnetometer (VSM), respectively. It was observed that the addition of CTAB and TOPO during synthesis had a significant effect on the morphological features. The crystal structure of the synthesized phosphors remained the same even after the addition of surfactants. In addition, the introduction of the surfactants not only influenced the morphology but had remarkable effects on the luminescent and magnetic properties. The significant enhancement in the luminescent and magnetic properties was observed in the case of TOPO assisted samples due to improved crystallinity, defect-free surface and uniform morphology. The results indicated that surfactant concentration also had a significant effect on the morphological, optical and magnetic properties.