Undoped Bi₂O₃ and single and double doped Bi₂O₃:M (where M = Tb³⁺ and Eu³⁺) nanophosphors were synthesized through a simple sonochemical process and characterized by using X-ray diffraction (XRD), scanning electron microscopy (SEM), transmission electron microscopy (TEM), high resolution transmission electron microscopy (HRTEM), EDS, diffuse reflectance (DRS) and photoluminescence (PL) spectrophotometry. The TEM micrographs show that resultant nanoparticles have a rod-like shape. Energy transfer was observed from host to the dopant ions. Characteristic green emissions from Tb³⁺ ions and red emissions from Eu³⁺ ions were observed. Interestingly, the Commission International de l'Eclairage (CIE) coordinates of the double doped Bi₂O₃:Eu³⁺(0.8%):Tb³⁺(1.2%) nanorods lie in the white light region of the chromaticity diagram and it has a quantum efficiency of 51%. The undoped Bi₂O₃ showed a band gap of 3.98 eV which is red shifted to 3.81eV in the case of double doped Bi₂O₃:Eu³⁺(0.8%):Tb³⁺(1.2%) nanorods. The photocatalytic activities of undoped nano Bi₂O₃ and double doped nano Bi₂O₃:Eu³⁺(0.8%):Tb³⁺(1.2%) were evaluated for the degradation of Rhodamine B under UV irradiation of 310 nm. The results showed that Bi₂O₃:Eu³⁺(0.8%):Tb³⁺(1.2%) had better photocatalytic activity compared to undoped nano Bi₂O₃. The evolution of CO₂ was realized and these results indicated the continuous mineralization of rhodamine B during the photocatalytic process. Thus double doped Bi₂O₃:Eu³⁺(0.8%):Tb³⁺(1.2%) nanorods can be termed as a bifunctional material exhibiting both photocatalytic properties and white light emission.