We report on the luminescence properties of hydrothermally synthesized BaLuF5:Pr3+(1%) nanoparticles having a cubic crystal structure. The properties were investigated at low temperatures using time-integrated and time-resolved luminescence spectroscopy under VUV photon excitation in the energy range of 5–45 eV. This spectral region covers both the Pr3+ 4f2→4f15d1 transitions and the intrinsic absorption of the host material. Due to the weak crystal field, only the intra-configurational Pr3+ 4f2→4f2 transitions were observed, resulting in photon cascade emissions. According to structural and morphological studies, the nanoparticles, with an average size of 21 ± 4 nm, were found to possess large amounts of defects, which are further confirmed through luminescence spectroscopy. The influence of non-radiative decay at the surface and energy transfer to the defects are responsible for the shortening of luminescence decay detected for the 1S0 transitions of Pr3+ ions and intrinsic UV cross-luminescence of host materials. We have discussed the specific energy transfer processes that populate various luminescence centers and evaluated BaLuF5:Pr3+(1%) nanoparticles for potential optical applications.