Nanoparticles research is at the forefront because of its enormous technological potentialities. Through the hydrothermal method, yttrium oxide nanoparticles having multiform morphologies are successfully synthesized. The morphology, structure, photoluminescence properties, and functional groups of these nanoparticles were studied through scanning electron microscopy (SEM), powder X-ray diffraction (PXRD), Fourier-transform infrared spectrometry (FTIR), photoluminescence spectroscopy (PL) and UV-Visible (UV-Vis) analyses. The XRD results showed that the neat samples have cubic Y2O3 structure. SEM micrographs revealed that the samples comprised aggregated nanoparticles having different sizes and shapes. The UV-Vis spectra indicated that the absorption peak position shifted towards the lower wavelength with a decrease in the particle size because of the changing surface structures and morphologies. Photoluminescence spectra showed a PL emission with a broad peak at approximately 564 nm, when the sample was excited by 280 nm wavelength. FTIR and EDAX spectra confirmed the presence of metal oxides. Yttrium oxide nanoparticles can counteract the influence of oxidative metabolites and present an antioxidant activity with the IC50 of 86.84 μg/mL. These properties indicated that these nanoparticles have a potential in biomedical and optoelectronic applications.