Novel orange red emitting CePO4:Sm3+ nanocrystals were synthesized for the first time via sol gel method. XPS analysis revealed the presence of Ce4+ ions as a surface defects and also confirmed that these surface defects can be cleared out by annealing. The broad band observed in the UV region of the absorption spectrum suggests the efficient sensitization of Sm3+ by Ce3+. Detailed luminescence studies were carried out by analyzing the variations in the luminescence spectra with different dopant concentrations of Sm3+ and annealing temperature. The presence of multiple emission centers originated from symmetric and asymmetric sites revealed the possibility of site selective sensitization of Sm3+ with 4f-5d absorption of Ce3+, Ce4+-O2- charge transfer band and f-f transition of Sm3+. The different quenching nature of electric and magnetic dipole transitions and the variation in the intensity pattern of electric dipole transition for two excitation wavelengths observed are also explained in relation with variations in the lattice symmetry. CIE color coordinates calculated for all the samples are found to be in the orange red region and find applications in the field of optoelectronics.