Nano crystalline NiFe1.8Gd0.2O4 ferrite was synthesized through citrate method at 400, 500, 600, 700 and 800°C. Samples were characterized using X-ray diffraction (XRD), Fourier transform infrared spectroscopy (FTIR), high resolution scanning electron microscopy (HRSEM), photoluminescence (PL) spectrophotometer, vibrating sample magnetometer (VSM) and X-ray fluorescence (XRF) technique. XRD analysis confirmed the formation of single-phase spinel structure in all the samples. From Rietveld analysis, the system is found to be inverse spinal structure with Gd3+ residing on octahedral 16c B-site and the grain boundary, while Ni2+ occupying the B-site at both 16c and 16d. The effect of preparation temperature on the crystalline phase, crystallite size, morphology, magnetic and optical properties was investigated in detail. The PL intensity of the ferrite material is enhanced upon increasing the sintering temperature from 500 to 800°C. Upon increasing the sintering temperature, the coercive field first decreases then increases; while, on the contrary, the saturation of magnetization (Ms) first deceases then increases.