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Abstract In this article, room temperature synthesis of Bi2O3 nanoparticles in a single‐pot reaction is reported. The nanoparticles were synthesized by reducing Bi(NO3)3·5H2O with NaBH4 as a reducing agent, SDS and oleic acid as stabilizing agents. The synthesized nanoparticles were characterized using UV‐vis absorption spectroscopy, FTIR spectroscopy, XRD, and HR‐TEM. The crystalline nature of the synthesized nanoparticles was confirmed through XRD and HRTEM data analysis. An average particle size of 14 nm (with quasi‐spherical morphology) and a wide band gap were measured for the synthesized nanoparticles. HRTEM image confirmed a highly crystalline growth at individual nanoparticle level. Dielectric measurement indicates a rapid reduction of both real and imaginary dielectric constants as the frequency increases to higher values. The potential application of the synthesized nanoparticles has been demonstrated in photocatalytic degradation of pollutants present in the industrial waste‐water.