Zinc oxide (ZnO) nanoparticles have been produced using precipitation methods from ethanolic solution. Rare-earth metal doping was performed, and the effect of lithium codoping on the luminescence properties of the rare-earth doped products was assessed. The resulting particles were characterized using cathodoluminescence and scanning electron microscopy. It was found that lithium significantly enhanced the cathodoluminescence signal from the rare-earth ions, which has been attributed to the increased integration of the rare-earth ions into the ZnO structure. The nanophase ZnO products were also annealed in argon, hydrogen, and oxygen, with hydrogen being the most successful for removing the broad defect emission present in as-grown samples and enhancing the ZnO near band edge emission.