Our goal was to investigate how doping with various rare earth (RE) ions influence crystallographic, morphological and optical properties of sol-gel synthesized nanocrystalline TiO2. To draw the conclusions, fixed content of RE was kept trough all samples, where RE= Pr, Nd, Sm, Eu, Dy, Tb, Ho, Er and Tm. X-ray diffraction measurements showed decrease of crystallite size from 150 Å for the undoped sample to 70 Å for Nd doped sample, while BET measurements showed an increase of specific area from 10 to 100 m2/g for Nd doped sample. Transmission electron microscopy showed densely aggregated crystalline nanoparticles of irregular shapes, dimensions of about 10-20 nm in size. Diffuse reflectance measurements showed small difference in optical absorption thresholds due to modifications of materials density of states after incorporation of trivalent rare earth ions. Photoluminescence measurements showed efficient emission in the case of doping with the following RE(III) ions: Nd, Sm, Eu, Dy, Ho, and Er, while luminescence of low intensity is detected for: Pr, Tb, and Tm. Basic assessment on photocatalytic activity based on MO degradation was performed and when compared to the undoped sample, photocatalytic performance of nanopowder improves with addition of RE in small concentrations except for Pr and Tb ions.