Nanorods of Y_0.95Eu_0.05PO₄@CePO₄ (Y_0.95Eu_0.05PO₄ phase was nucleated first and then a CePO₄ phase was nucleated) and CePO₄@Y_0.95Eu_0.05PO₄ (CePO₄ phase was nucleated first and then Y_0.95Eu_0.05PO₄ phase was nucleated) were prepared at a relatively low temperature of 140 °C in ethylene glycol medium. Based on XRD, TEM and Raman studies it has been inferred that Y_0.95Eu_0.05PO₄@CePO₄ sample consists of a mixture of bigger (length around 800-1000 nm and width around of 80-100 nm) and smaller (length around 70-100 nm and width around 10-20 nm) nanorods, having monoclinic CePO₄ and tetragonal YPO₄ structure, whereas CePO₄@Y_0.95Eu_0.05PO₄ sample consists of mainly small nanorods having a single phase CePO₄ structure. From the detailed luminescence studies it has been established that there exists significant incorporation of Y³⁺Eu³⁺ ions in the CePO₄ phase in CePO₄@Y_0.95Eu_0.5PO₄ sample. This has been attributed to the cation exchange taking place between Ce³⁺ ions in CePO₄ host and Eu³⁺ and Y³⁺ ions in solution during the synthesis stage. Unlike this, such an exchange is not possible for Y_0.95Eu_0.05PO₄@CePO₄ sample synthesized under identical conditions due to the higher solubility product (K_sp) value of YPO₄ compared to CePO₄. Incorporation of Eu³⁺ in the CePO₄ lattice of CePO ₄@Y_0.95Eu_0.5PO₄ sample is confirmed by the significant reduction in the lifetime of ⁵D₀ level of Eu³⁺ and the luminescence intensity from Eu³⁺, arising due to the electron transfer between the Ce³⁺Ce⁴⁺ and Eu³⁺Eu²⁺ species. These results are further supported by the non-radiative decay rates and quantum yields calculated from the emission spectrum.