Powder samples of pure BaAl2O4 and doped with 4.9 atom % Eu in relation to Ba were prepared by a hydrothermal route. The samples were characterized by X-ray diffraction, Eu-151 Mossbauer spectroscopy, synchrotron-based X-ray absorption spectroscopy at the Ba L-3- and Eu L-3-edges, and photoluminescence measurements. Diffraction lines were broadened, indicating that the samples were nanocrystallline. The samples possessed a hexagonal crystal structure, space group P6(3). Eu-151 Mossbauer spectroscopy revealed the presence of Eu in the 3+ oxidation state. The same information on the Eu oxidation state was also obtained by the Eu L-3-edge X-ray absorption near-edge structure of the doped sample. Extended X-ray absorption fine structure showed an Eu3+ ion substituted for Ba2+ on the Ba2 site in the BaAl2O4 host structure, with charge compensation by an interstitial 0 in the vicinity of the Ba2 site. That was confirmed by a Rietveld structure refinement for the Eu-doped BaAl2O4 sample. Analysis of the diffraction line broadening for the prepared samples was performed simultaneously with the structure refinement. Both the dopant Eu3+ and the interstitial 0 acted as defects in the host BaAl2O4 lattice, which increased the lattice strain from 0.02% for pure BaAl2O4 to 0.17% for the Eu-doped sample. Crystallite sizes in the samples increased with Eu doping from 32 nm for pure BaAl2O4 to 36 nm for Eu-doped BaAl2O4. This could likely be related to the increase in the diffusion rate of the cations in the sample when a part of the Ba2+ cation content was exchanged with smaller Eu3+ cations. The Eu-doped BaAl2O4 sample exhibited red photoluminescence under excitation with lambda(exc) = 308 nm. The observed emission spectrum indicated that Eu3+ ions occupied the Ba site with lower symmetry in the doped sample.