A comprehensive survey of electronic structure and optical properties of rare-earth ions-doped semiconductor is of vital importance for their potential applications. In this work, Eu³⁺-doped β-Ga₂O₃ nanocrystals were synthesized via a combustion method. The evolution of the optical properties of nanophosphors with increasing the annealing temperature was investigated in detail by means of excitation and emission spectra at room temperature and 10 K. Eu³⁺ ions were proved to be incorporated into the crystal lattice of the β-Ga₂O₃ phase after annealing the as-prepared nanoparticles at 1100 °C. It was observed that the substitution of Eu³⁺ for Ga³⁺ occurred at merely single site, in spite of two crystallographically nonequivalent sites of Ga³⁺ in β-Ga₂O₃. Spectroscopic evidence corroborated and clarified the local symmetry of C_s for Eu³⁺ at this single site. From the high-resolution excitation and emission spectra, 71 crystal-field levels of Eu³⁺ in β-Ga₂O₃ were identified and analyzed in terms of 19 freely varied free-ions and crystal-field parameters based on C_s symmetry. The standard deviation of the final fitting is as low as 12.9 cm⁻¹, indicating an excellent agreement between experimental and calculated energy levels. The temperature-dependent luminescence dynamics of the ⁵D₀ multiplet for Eu³⁺ in β-Ga₂O₃ phosphors has also been revealed for the first time from 10 to 300 K.