Nanoparticles suspended in polymeric host materials are found to have tremendous potential for various photonic and biological applications due to their unique material properties. Polymethyl methacrylate (PMMA) is known to be one of the best vinyl polymers owing to its excellent dimensional quality, weather resistance, easiness of synthesis, resistance to laser damage, and high mechanical strength. In this article, we describe a methodology to fabricate thin discs of nanocrystalline erbium oxide (Er2O3) suspended in PMMA (Er2O3/PMMA). The optical transparency of PMMA was confirmed in the ultraviolet, visible, and the near-infrared regions of the electromagnetic spectrum, making it possible to observe only the Er2O3 spectra over the wavelength investigated. The room-temperature absorption spectrum of Er2O3/PMMA has been taken in the 400 to 820 nm wavelength region. Analysis of the spectrum reveals a consistent agreement between our experimental data and those reported earlier for Er3+ in nanocrystalline Er3+ : Y2O3. A solid solution exists between Er2O3 and Er3+ : Y2O3 in terms of their physical properties. Therefore, our experimental results conclude that the presence of PMMA does not significantly alter the crystal symmetry as well as the co-ordination environment of the Er3+ ions in Er2O3. Our results also emphasize that the Er2O3/PMMA may have future possibilities for numerous technological applications.