In this work, we investigate the effects of Co-doping and high-temperature annealing from 400° C to 800 °C on the structural, optical, and electronic characteristics of titanium dioxide (TiO2) nanoparticles (NPs). Sol-gel route was adopted to prepare Ti0.95Co0.05O2 (TCO) NPs. The microstructural characterization using transmission electron microscopy suggests that the grain sizes of TCO NPs enhance with annealing temperatures. The selected area electron diffraction patterns of TCO annealed at 400° C, 600° C, and 800° C show the rings which correspond to anatase, mixed, and rutile phases respectively. Energy dispersive X-ray mapping in scanning transmission electron microscopy mode exhibits the distribution of NPs and their elemental compositions. UV–Visible absorption spectra show a prominent shift to the visible region with slight variation in bandgaps. The electron energy loss spectroscopy confirms the divalent and tetravalent nature of Co and Ti ions respectively. The photo-electron spectroscopic measurements mainly valence band and resonant photoelectron spectroscopies were used to investigate the electronic environment of Co ions in the TiO2 matrix. Valence band spectroscopic results of TiO2 NPs demonstrate the role of O-2p-derived states, but for TCO samples, Co-derived states are also seen. The resonant photo-electron spectra indicate that Co 3d ions are strongly hybridized with Ti3+ defective states.