In this study, the sol-gel method was adopted to create the Sm-doped TiO₂ quantum dots (QDs), which were then annealed at different temperatures of 300, 400, and 500 °C. The XRD data show that all samples' crystal structures correspond to the tetragonal anatase phase, with the annealed sample at 500 °C exhibiting improved crystallinity. According to the TEM investigations, the particles are almost homogeneous, ultra-fine, and exhibit the quantum size effect. The presence of elements such as Ti, Sm, and O in the sample was confirmed by EDS, while the average particle size distribution of the Sm-doped TiO₂ QDs, which were annealed at 500 °C, was 1.82 ± 0.06 nm, as confirmed by TEM. UV–visible spectra reveal that the bandgap increases from 3.12 to 3.27 eV because of the increasing temperature. Studies carried out on photoluminescence demonstrate that as the annealing temperature is raised, the PL emission intensity also increases over the entire UV–visible region. These findings suggest that TiO₂ QDs characteristics can be modified for optoelectronic applications by adjusting the annealing temperature. In addition to these intriguing results, Sm-doped TiO₂ QDs that underwent 500 °C annealing demonstrate a larger zone of inhibition (11 mm for 300 μg/mL) against E. coli in comparison to other annealed samples, while S. aureus does not exhibit a discernible enhancement.