Cerium oxide (CeO2) can exhibit good photocatalytic and photoantibacterial activities. However, its light-harvesting property is rather limited due to its large band gap. In order to boost these properties, doping with metal ions can improve light absorption and charge mobility. In this report, CeO2 and palladium−doped CeO2 (Pd−CeO2) NPs were synthesized via the microwave-assisted synthesis method. The structural, optical, and morphological studies of CeO2 and Pd−CeO2 NPs were carried out using various techniques. Mixed phases of CeO2/Ce2O3 were observed in pure CeO2 (S−CeO2) and Pd−CeO2. However, the Ce2O3 phase gradually disappeared upon doping with a higher percentage of Pd. Almost spherical particles were observed with average sizes between 6 and 13 nm. It was found that the incorporation of Pd reduced the particle size. Moreover, band gap energies of S−CeO2 and Pd−CeO2 NPs were reduced from 2.56 to 2.27 eV, and the PL intensities were also quenched with more Pd doping. The shifts in the conduction band and valence band were found to cause the reduction in the band gap energies of S−CeO2 and Pd−CeO2 NPs. In the case of photocatalytic degradation of methylene blue, photoelectrochemical, and photoantibacterial activities, Pd−CeO2 NPs showed enhanced activities under visible light irradiation. Therefore, Pd−CeO2 NPs have been shown to be a visible-light active material.