This study reports the green synthesis of Bi₂O₃ and Ce-doped Bi₂O₃ nanoparticles using gallic acid as a sustainable fuel via a solution combustion method. Structural and morphological analyses confirmed the formation of crystalline monoclinic Bi₂O₃ with improved porosity and reduced agglomeration upon Ce doping. Optical studies revealed bandgap narrowing from 3.26 eV to 3.05 eV, enhancing visible light absorption. Electrochemical investigations demonstrated superior redox behaviour, higher specific capacitance, and improved charge transfer kinetics for Ce–Bi₂O₃. The materials also exhibited enhanced biosensing performance toward ascorbic acid due to increased oxygen vacancies and active sites. Photocatalytic studies showed efficient degradation of malachite green dye, achieving 82.4% for Bi₂O₃ and 96.7% for Ce–Bi₂O₃ within 10 minutes under UV irradiation. The doped sample exhibited a higher rate constant (0.312 min⁻¹), confirming accelerated degradation kinetics. The improved performance is attributed to effective charge separation and Ce³⁺/Ce⁴⁺ redox cycling. Overall, Ce–Bi₂O₃ nanoparticles demonstrate significant potential for electrochemical sensing, photocatalysis, and environmental remediation applications.