Gd 2 O 3 nanoparticles synthesized by solution combustion method were used to prepare PVA-Gd 2 O 3 nanocomposite films of varying concentrations (2 wt%-6 wt% of filler) by solution casting method. Being a rare earth oxide, gadolinium oxide was expected to exhibit good photoluminescence and the nanocomposite was expected to be flexible as well. The Gd 2 O 3 nanoparticles prepared were found to be in cubic phase with an average size of 19 nm. Raman spectra showed the incorporation of Gd 2 O 3 into the polymer matrix. Scanning electron microscope images revealed that the particles were porous in nature, agglomerated and distributed evenly on the surface of the film in the form of clusters. The UV-Visible absorption spectra gave direct optical energy band gap value in the range 5.78-4.86 eV. Both band gap as well as the Urbach energy are seen to decrease with increasing concentration of the dopant. Four prominent photoluminescence peaks were observed in all the three composite films in the UV region (318 nm), deep blue region (396 nm), blue region (477 nm) and green region (553 nm). The color purity of the films using CIE coordinates was found to be the highest, 82.81%, in the 2 wt% film making this film a promising material for blue OLED's and blue flexible screens.