A molten salt synthetic method is described in this work for synthesizing rare-earth doped yttrium oxide (RE:Y₂O₃) and rare-earth zirconates (RE₂Zr₂O₇) since it is one of the simplest, most versatile, and cost-effective approaches available for obtaining crystalline, chemically purified, single-phase powders at lower temperatures and often in overall shorter reaction times with little residual impurities as compared with conventional solid-state reactions. RE:Y₂O₃ are promising rare-earth-ion-activated phosphor materials with wide applications including amplifiers, lasers, waveguides, X-ray imaging, bioimaging, and field emission or electroluminescent displays due to their luminescent characteristics and stability in high vacuum. RE₂Zr₂O₇ are of great interest in recent years for their possible applications as high-temperature heating elements, oxidation catalysts, thermal barrier coatings, nuclear waste hosts, and host materials for luminescence centers. The as-prepared nanoparticles have sizes around 100 nm for RE:Y₂O₃ and around 30 nm for RE₂Zr₂O₇. They are thoroughly characterized by X-ray diffraction (XRD), scanning electron microscopy (SEM), transmission electron microsecopy (TEM), high resolution TEM (HRTEM), selected area electron diffraction (SAED), energy-dispersive X-ray spectroscopy (EDS), and UV-vis spectroscopy to delineate the structure and composition of these nanoparticles. Their room temperature luminescent properties (photoluminescence and catholuminescence) are measured as a function of the particle size and doping level. In order to process these materials for device fabrication, they are made water soluble by surface modification of these nanoparticles with DMSA (2,3-dimercaptosuccinic acid). We will discuss the effect of these nano-coatings on the optical properties of the nanoparticles.