Gd₂O₃ nanoparticles were synthesized for the first time by sol-gel combustion method and YBCO high temperature superconductor by sol-gel method. X-ray powder diffraction pattern of the nanoparticles and prepared superconductor showed single phase by both methods. The average size of Gd₂O₃ nanoparticles, according to the Scherrer formula, computed 29 nm, which is consistent with the results obtained from the TEM images. The nanoparticles with two weight perecent of 0.05 and 0.1 were added to YBCO superconductor. The morphology, structure and superconducting properties investigated by scanning electron microscopy, X-ray diffraction and AC susceptibility in product powders respectively. Rietveld refinements from X-ray diffraction data and results of characteristic showed that both Gd₂O₃ and YBCO phases coexisted in the products and critical temperature of superconductor decreased with increasing additive content.