Nanoparticles of Eu3+-doped BaTiO3 having a hexagonal structure, which is a thermodynamically stable phase above 1432°C, have been prepared at a low temperature of 110°C based on the coprecipitation of Ti4+, Ba2+, and Eu3+ in ethylene glycol medium by adding urea. Based on differential thermal analysis studies, it is inferred that the as-prepared hexagonal phase of BaTiO3:Eu3+ is unstable and decomposes to the anatase form of TiO2 and barium carbonate above 420°C. Luminescence properties of the hexagonal form of BaTiO3:Eu3+ nanoparticles have been compared with cubic BaTiO3:Eu3+ nanoparticles prepared by the combustion method. Based on the detailed luminescence studies of Eu3+ in both cubic and hexagonal form of BaTiO3 samples, it is inferred that Eu3+ ions mainly occupy the Ti4+ sites in hexagonal BaTiO3 and both Ba2+ and Ti4+ sites in cubic BaTiO3. A comparison of the luminescence properties of Eu3+ in hexagonal and cubic form of BaTiO3 suggested that there is increased distortion around Eu3+ in hexagonal BaTiO3 phase compared with cubic BaTiO3 phase, and this has been explained in terms of the distorted environment created around larger ionic radii Eu3+ ions occupying the smaller ionic radii Ti4+ site. There is a significant difference in the decay constant for 5D0 level of Eu3+ for these two forms of BaTiO3:Eu3+ nanoparticles.