We present in this paper a study of the structural and photoluminescence (PL) properties of terbium (Tb) doped zinc oxide (ZnO) nanoparticles synthesized by a simple low temperature chemical precipitation method, using zinc acetate and terbium nitrate in an isopropanol medium with diethanolamine (DEA) as the capping agent at 60 °C. The as-prepared samples were heat treated and the PL of the annealed samples were studied. The prepared nanoparticles were characterized with X-ray diffraction (XRD). The XRD patterns show the pattern of typical ZnO nanoparticles and correspond with the standard XRD pattern given by JCPDS card No. 36-1451, showing the hexagonal phase structure. The PL intensity was enhanced due to Tb3+ doping, and it decreased at higher concentrations of Tb3+ doping after reaching a certain optimum concentration. The PL spectra of Tb3+ doped samples exhibited blue, bluish green, and green emissions at 460 nm (5D3 – 7F3), 484 nm (5D4 – 7F6), and 530 nm (5D4 – 7F5), respectively, which were more intense than the emissions for the undoped ZnO sample. Based on the results, an energy level schematic diagram was proposed to explain the possible electron transition processes.