Ferromagnetism was observed at room temperature in monodisperse CeO2 nanospheres synthesized by hydrothermal treatment of Ce(NO3)3·6H2O using polyvinylpyrrolidone as a surfactant. The structure and morphology of the products were characterized by X-ray diffraction (XRD), Raman spectroscopy, transmission electron microscopy, high-resolution transmission electron microscopy, and field-emission scanning electron microscopy (FE-SEM). The optical properties of the nanospheres were determined using UV and visible spectroscopy and photoluminescence (PL). The valence states of Ce ions were also determined using X-ray absorption near edge spectroscopy. The XRD results indicated that the synthesized samples had a cubic structure with a crystallite size in the range of approximately 9 to 19 nm. FE-SEM micrographs showed that the samples had a spherical morphology with a particle size in the range of approximately 100 to 250 nm. The samples also showed a strong UV absorption and room temperature PL. The emission might be due to charge transfer transitions from the 4f band to the valence band of the oxide. The magnetic properties of the samples were studied using a vibrating sample magnetometer. The samples exhibited room temperature ferromagnetism with a small magnetization of approximately 0.0026 to 0.016 emu/g at 10 kOe. Our results indicate that oxygen vacancies could be involved in the ferromagnetic exchange, and the possible mechanism of formation was discussed based on the experimental results.