<p>Diluted magnetic semiconductors (DMSs) are vital for advancing spintronic technology, though the origin of their ferromagnetic properties remains contentious. The fundamental question persists whether these magnetic properties arise from intrinsic material characteristics or dopant incorporation. This study investigates the effects of rare earth Nd³⁺ ion doping in SnS₂ to address this uncertainty and explore potential optoelectronic applications. We synthesized two-dimensional Nd-doped SnS₂ nanoparticles (Sn_1−<i>x</i>Nd_<i>x</i>S₂) with varying Nd concentrations (<i>x</i> = 0.00, 0.01, 0.03, 0.05, 0.07) and examined their structural, morphological, optical, and magnetic characteristics. X-ray diffraction and Raman studies confirmed the hexagonal phase of SnS₂ nanoparticles. FESEM revealed flower-like or layered structures, while EDAX and XPS confirmed the presence of Sn⁴⁺, S²⁻, and Nd³⁺ ions without impurities. Optical properties, including refractive index and bandgap, were tunable through Nd doping. Raman analysis showed a red shift in the <i>A</i>_1g mode, indicating successful Nd incorporation. Photoluminescence spectra exhibited defect-related emissions, including a sharp near-infrared peak relevant to fiber optic communications. Notably, weak room temperature ferromagnetism was observed in Nd-doped SnS₂ nanoparticles in the low field, potentially linked to Sn vacancies. Magnetic field and magnetization (<i>M</i>–<i>H</i>) measurements of Nd-doped SnS₂ demonstrate the coexistence of ferromagnetic and paramagnetic behavior at low temperatures.</p>