Rare-earth ion (Er3+) substituted ZnFe2−xErxO4 nanoparticles at different Er concentrations (x = 0, 0.2, 0.4, 0.6, and 0.8) were synthesized by surfactant (polyethylene glycol) assisted co-precipitation method and studied for structural and magnetic properties of the synthesized nanoparticles. All the ZnFe2−xErxO4 ferrite nanoparticles exhibited an average size of around 25 nm. It was observed that substituent Er3+ predominantly occupy octahedral sublattice in spinel structure. The crystal lattice unit cell volume and magnetic disorder increased with increase of Er3+ concentration. The magnetic parameters such as spin-glass or superparamagnetic blocking temperature (TB), maximum magnetization (Mmax), remnant magnetization (Mr) and coercive field (Hc) of the ZnFe2−xErxO4 ferrite nanoparticles decreased with decreasing temperature (3–300 K). High and low magnetizations were observed for the nanoparticles at 3 K and 300 K, respectively. The observed magnetic properties were explained clearly by considering the substitution of Er3+ ion in to the octahedral sub-lattice and diminishing the magnetic exchange interactions between Fe3+ ions with [Ar] 3d5 and Er3+ ions with [Xe] 4f11 5d10 electronic configurations. The present studies confirm that Er3+ substitution does not enhance magnetic properties of ZnFe2O4 nanoferrites.