A forced hydrolysis technique was used for preparing Sm₂O₃ nanoscale powders at low processing temperatures. The technique used samarium oxide, nitric acid and urea as sources and had a potential for large-scale production for industrial applications. The various factors which influenced the sizes and coagulation of powder particles have been discussed in detail, and the influence mechanisms have been evaluated theoretically, the option result was found to be at 0.05M Sm³⁺, 1.5h isothermal maintenance at 90°C. When the concentration of urea was kept at 1.0M, the particles obtained by this method were spherical, the average size was 40nm. The catalytic activity for the esterification of phthalic anhydride with octanol was also studied. The results showed that the nanoscale powder of Sm₂O₃ was favored of increasing yield of ester and decreasing reaction time.