Eu3+-doped lead sodium tellurite glasses containing silver nanoparticles (NPs) were synthesized by melt-quenching technique and annealed for different time intervals at above the glass transition temperature. The glasses were characterized by UV–Vis–IR absorption, photoluminescence spectroscopy and transmission electron microscope imaging. Four absorption peaks of Eu3+ ion were observed due to transitions from ground state to different excited states in 400–600nm region. The surface plasmon resonance (SPR) peak of silver NPs was probed at 632nm. Five emission lines were recorded at 568, 587, 614, 650 and 704nm which were intensified in the order of ∼1.9 times for heat-treated samples containing silver NPs. The average size of NPs was estimated to be ∼10nm. Different mechanisms for interaction of light with metal and luminescent ions are discussed. Such enhancements are attributed to the strong local electric field induced by SPR of silver NPs as the major factor, and energy transfer from surface of silver NP to Eu3+ ion. The glasses show promising properties for optical applications.