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Unusual optical bandgap narrowing is observed in undoped SnO2 nanoparticles synthesized by the solution combustion method. The estimated crystallite size is nearly 7 nm. Though the quantum confinement effect predicts a larger optical bandgap for materials with small crystallite size than the bulk, the optical bandgap in the as synthesized materials is found to be 2.9 eV compared to the reported value of 3.6 eV for bulk SnO2 particles. The yellow-green photoluminescence emissions and the observed narrowing of the bandgap can be attributed to the deep donor levels of oxygen vacancies, owing to the high exothermicity of the combustion reaction and the faster cooling rates involved in the process.