Results of XPS characterization, theoretical modeling and photoluminescence study of bismuth-implanted gadolinium oxide (Gd2O3:Bi) films are presented. Scenarios for the introduction of bismuth ions into amorphous-crystalline Gd2O3 host and mechanisms for the formation of optically active centers are considered. It has been demonstrated that the optical properties of Gd2O3:Bi films are guided by the interplay of a quite complex system of single Bi2+ ions, (Bi3+–Bi3+) pairs and single Bi3+-ions, oxygen vacancies and "defective" gadolinium ions. Photoinduced excitation-relaxation processes involving various Bi-related centers and defect states of the host are observed. Due to the multicolor emission (red, green and blue) of single Bi2+ ions, (Bi3+- Bi3+) pairs and single Bi3+ ions excited in the ultraviolet spectral range, the UV–VIS energy conversion in a wide spectral range is realized. The advantage of Gd2O3:Bi as a material for energy conversion lies in the fact that due to the polyvalence of bismuth and the variety of different optical centers, a wide range of both absorbed UV light and emitted VIS light is involved in the conversion. This indicates the prospects for practical use of Gd2O3:Bi films as multifunctional material for energy conversion and photo-detection systems.