The photoelectric nanocomposite poly(2-methoxy-5-butoxy)-p-phenylene vinylene/Eu2O3 (PMOBOPV/Eu2O3) was prepared by a dehydrochlorination in situ polymerization. Results from Fourier transform infrared (FT-IR) spectroscopy indicate that PMOBOPV is coated onto the surface of Eu2O3. The composite dimensions were observed by high resolution transmission electron microscopy (HRTEM). PMOBOPV/Eu2O3 nanocomposites possess core-shell structures and their diameters were about 75-145 nm with a PMOBOPV coating thickness of about 25 nm. A stronger red-shifted absorption peak was observed with an increase in Eu2O3 content for PMOBOPV/Eu2O3 in the UV-Vis spectrum. Photoluminescence spectroscopy indicates that the maximum emission wavelength of the PMOBOPV/Eu2O3 is blue-shifted and the intensity of photoluminescence increases with increasing Eu2O3 content. PMOBOPV/Eu2O3 shows increased fluorescence because of an intermolecular photo-induced charge transfer process. The optical band gap (Eg) of PMOBOPV/Eu2O3 decreased gradually with increasing Eu2O3 content. The third-order optical nonlinear susceptibility of PMOBOPV/Eu2O3 nanocomposites was measured by degenerate four wave mixing. Results show that the third-order nonlinear optical response of PMOBOPV/Eu2O3 nanocomposites increases gradually with increasing Eu2O3 content. This can be attributed to intermolecular photo-induced electron transfer and delocalized π electron coupling between PMOBOPV and Eu2O3.