SummaryTm-doped TiO2 nanoparticles were synthesized using a water-controlled hydrolysis reaction. Analysis was performed in order to determine the influence of the dopant concentration and annealing temperature on the phase, crystallinity, and electronic and optical properties of the resulting material. Various characterization techniques were utilized such as X-ray diffraction, Raman spectroscopy, X-ray photoelectron spectroscopy and UV–vis spectroscopy. For the samples annealed at 773 and 973 K, anatase phase TiO2 was obtained, predominantly internally doped with Tm3+. ICP–AES showed that a doping concentration of up to 5.8 atom % was obtained without reducing the crystallinity of the samples. The presence of Tm3+ was confirmed by X-ray photoelectron spectroscopy and UV–vis spectroscopy: the incorporation of Tm3+ was confirmed by the generation of new absorption bands that could be assigned to Tm3+ transitions. Furthermore, when the samples were annealed at 1173 K, a pyrochlore phase (Tm2Ti2O7) mixed with TiO2 was obtained with a predominant rutile phase. The photodegradation of methylene blue showed that this pyrochlore phase enhanced the photocatalytic activity of the rutile phase.