Gadolinium doped tin oxide–iron oxide nanoparticles (Gd/Fe 1.727 Sn 0.205 O 3 ) were synthesized via sol–gel method followed by hydrothermal method. Ethylene glycol played the role of directing agent to control surface morphology. Physical and optical properties of Gd/Fe 1.727 Sn 0.205 O 3 nanoparticles were studied as a function of calcination temperature. Characterization techniques like thermogravimetric analysis (TGA), fourier transform infrared spectroscopy (FTIR), X-ray diffraction (XRD), particle size analyzer (PSA), scanning electron microscopy (SEM), transmission electron microscopy (TEM), UV–Visible spectroscopy (UV–VIS), and four-point probe technique have been used to study the thermal degradation, kinetics, thermodynamic properties, structural analysis, surface morphology, optical and electrical properties of nanoparticles. Prominent peaks in FTIR spectra at 563, 418, and 542 cm −1 were observed for Fe–O, Sn–O, and Gd–O, respectively. The uncalcined nanoparticles follow first order kinetics and Freeman–Carrol method was applied for calculating the activation energy. It was observed that nanoparticles calcined at 700 °C have 8.9 nm particle size calculated with particle size analyzer, which is smallest among all and having band gap energy of 2.3 eV. SEM micrographs show hexagonal geometry. The dependence of electrical resistance on temperature shows that these nanoparticles possess semiconducting behavior. These nanoparticles can be used as cathode material for solid oxides fuel cells (SOFCs) application. The nanoparticles calcined at 700 °C showed highest power density of 83.27 W cm −2 at 650 °C with open current voltage of 0.793 V. Highlights Novel high surface area of Gd/Fe 1.727 Sn 0.205 O 3 nanoparticles were synthesized using sol–gel and hydrothermal methods. The smallest band gap and particle size was observed for the sample calcined at 700 °C. Four probe dc conductivity value recoded was 0.709 mS/cm for sample calcined at 700 °C. Solid oxides fuel cell (SOFC) demonstrates that Gd/Fe 1.727 Sn 0.205 O 3 as cathode performed better when calcined at 700 °C with high power density of 83.27 W cm −2 .