Nano-Eu-doped maghemite Fe2-xEuxO3 samples with x = 0, 0.02, 0.04, and 0.06 were formed using a sol–gel rout. Phase identification, utilizing X-ray diffraction data (XRD), revealed the formation of ordered maghemite phase, which is confirmed by Fourier transform infrared (FTIR) measurements. Structural analysis was performed applying Rietveld method to determine the distribution of cations and intrinsic vacancies among different crystallographic sites. The different oxidation states of different ions were investigated using X-ray photoelectron spectroscopy (XPS) technique. Using UV–Vis diffused reflectance, the determined optical band gap energy of nano-maghemite is 2.08 eV and became 2.24, 2.13, and 2.18 eV as maghemite was doped with 2, 4, and 6% Eu, respectively. The effect of doping on the absorbance, reflectance, refractive index, extinction coefficient, dielectric constant, optical conductivity, and nonlinear optical (NLO) parameters of maghemite was explored. Sample with 2% Eu revealed the highest NLO values as compared with other samples. All samples exhibited a superparamagnetic feature. The saturation magnetization (Ms), remanence (Mr), and coercive field (Hc) for undoped maghemite sample were found to be 59.34 emu/g, 65.31 Oe, and 6.49 emu/g, and they are improved to 59.34 emu/g, 65.31 Oe, and 6.49 emu/g, respectively, as maghemite doped with 2% Eu.