TiO₂ nanopowders consisting of anatase and brookite, modified with all the rare earth (RE) group metals (except Pm), were successfully synthesized by a simple template-free one-step hydrothermal method using titanium butoxide as a precursor in water solutions. X-ray diffraction method showed that the addition of rare earth elements influenced the anatase-brookite (A-B) phase composition inconsistently: both an increase and a decrease in the brookite content were observed. XRD peak broadening analysis has been carried out by the Scherrer equation, modified Scherrer equation, the Williamson-Hall method, the Size-strain plot and the Halder-Wagner method. A decrease in the crystallite size due to the RE modification was confirmed in the novel RE/A-B materials. Porosity measurements revealed the mesoporous structure and developed surface area of the samples. UV-Vis diffuse reflectance spectra showed a blue shift compared to unmodified A-B, hereby indicating an increase in the band gap of the modified powders due to a phenomenon of quantum confinement or size quantization. The samples demonstrated high photocatalytic performance, particularly in the reaction of H₂ production, where the activity of RE (Gd, Tb, Tm)/A-B is approximately twice higher compared with A-B. This enhancement in photocatalytic activity is attributed to changes in the electronic structure, a reduction in crystallite size, increased porosity, and a larger surface area than A-B. These materials were also tested for the degradation of Rhodamine B in aqueous media, to prove the potential application in remediation processes.