A low temperature‐assisted and oxalyl dihydrazide fuel‐induced combustion synthesized series of uncalcined MgAl2O4:Eu3+ nanophosphors showed an average crystallite size of ~20 nm, and bandgap energy (Eg) of 4.50–5.15 eV, and were validated using density functional theory and found to match closely with the experimental values. The photoluminescence characteristic emission peaks of Eu3+ ions were recorded between 480 and 680 nm. The nanophosphors excited at 392 nm showed f–f transitions assigned as 5D0→7FJ (J = 0, 1, 2, and 3). The optimized MgAl2O4 phosphors had Commission Internationale de l'Eclairage coordinates in the red region, a correlated colour temperature of 2060 K, and a colour purity of 98.83%. The estimated luminescence quantum efficiency (
η) was observed to be ~63% using Judd–Ofelt analysis. Electrochemical and photocatalytic performance were explored and indicated its multifunctional applications. Therefore, MgAl2O4:Eu3+ nanophosphors could be used for the fabrication of light‐emitting diodes, industrial dye degradation, and as electrodes for supercapacitor applications.